Ethiopia’s central bank today issued a statement calling bitcoin “illegal”, prohibiting the use of any other currency except Bir for all transactions.
Unlike its western neighbor the Central African Republic, which adopted bitcoin as legal tender, raising concerns from the International Monetary Fund, the National Bank of Ethiopia (NBE) does not recognize the virtual currency, it said in an announcement on Monday. .
“The national currency of Ethiopia is the Ethiopian Birr; any financial transaction in Ethiopia is to be paid for in Birrs,” the bank said in a statement to state-affiliated news outlet Fana Broadcasting Corporate.
While the bank recognizes the increase in the use of bitcoin in the East African country, it is adamant that it has not allowed citizens to use the currency for transactions and payments, warning of negative consequences for those who do. Huh. It has taken this stand because it believes that virtual currency is being used to conduct informal financial activities and money laundering in the country.
A Twitter user claiming to be from the financial services sector in Ethiopia, tweetedTagging the Prime Minister of the Federal Republic of Ethiopia, Abiy Ahmed Ali, “Why this is happening in Ethiopia, it is supposed to approve fully functional crypto currencies and legitimate digital currencies in Ethiopia, all users Don’t use it for corruption.”
The announcement comes as Octagon Networks, a cyber security firm offering services from the country’s capital Addis Ababa, recently converted all of its liquid assets into bitcoin.
Cardano looking forward to leading payment network in Ethiopia
In April 2021, the Ethiopian government launched an initiative with Input-Output Global, the company responsible for the Cardano blockchain, to create decentralized digital student and teacher IDs. Three weeks ago, IOG announced it was ready for an implementation phase, which would initially benefit 1 to 2 million students and teachers, on the way to a target of 50 million students and 750,000 teachers.
Cardano’s ultimate goal is to build a payments network within Ethiopia before branching out into the rest of the African continent.
Diverse approaches to digital assets in Africa
Africa’s approach to digital currencies is fragmented. In April this year, the Central African Republic, one of the world’s poorest countries, made bitcoin legal tender. Cameroon, the Democratic Republic of the Congo and the Republic of the Congo in April this year negotiated with the TON Foundation to launch local stablecoins without ties to central banks. “We are not attempting to replace a national currency, and we are not aiming to do a CBDC, which is clearly run by a central bank,” a source told Forbes at the time. Nigeria introduced its own central bank digital currency, eNaira, last year.
The NBE encouraged citizens to abstain from using cryptocurrencies and to report any illegal transactions to the Ethiopian authorities.
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