Ethiopia Prepares to Regulate Crypto, Even as Official Ban Stays Put

• Ethiopia maintains a crypto ban but is developing systems to regulate the sector.
• Financial experts are receiving international training to monitor illegal transactions.
• Officials emphasize crypto’s growing use in terrorism, fraud, and money laundering.

Ethiopia is laying the groundwork for cryptocurrency regulation, despite maintaining an official ban on cryptocurrency trading. The country’s Financial Intelligence Service confirmed the move during a regional anti-money laundering conference in Addis Ababa.

Training and Capacity Building Underway

According to a report from The Reporter , the FIS has started training financial crime experts to detect and respond to illegal crypto transactions. FIS Director Muluken Amare, said the training is part of broader preparations to manage unauthorized crypto activity and potential future legalization.

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The initiative is in partnership with the United Nations, Russia, and member countries of the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG). The organization includes 21 countries and is based in Tanzania.

Notably, the National Bank of Ethiopia formally banned the use of cryptocurrencies in a revised proclamation issued months ago. Under current law, only the Ethiopian Birr is recognized for financial transactions.

“Trading in digital currencies other than the Ethiopian Birr is not allowed in Ethiopia,” Amare said. “But we are offering training to prepare for the possibility of unauthorized activities.”

Despite this, FIS officials acknowledge that crypto transactions may be happening informally. As a result, Amare stressed the need to assess the volume of such activities. “It cannot be assumed that all such transactions are illegal,” he added.

Meanwhile, only those linked to criminal activity, such as terrorism or money laundering, would be subject to investigation.

Crypto Risks Cited by Regional Experts

International and regional experts at the ESAAMLG summit echoed concerns over crypto’s misuse. Kamal Anwar, a United Nations counter-terrorism program officer, said virtual assets are being used for terrorism financing, tax evasion, corruption, and fraud.

Muluken Yirga, a senior legal advisor to ESAAMLG, warned that terrorist groups in the region, including Al-Shabaab, Al-Qaeda, ISIL, and Daesh, are increasingly using cryptocurrencies to raise and move funds.

He called for greater regional cooperation, stronger financial intelligence units, and improved law enforcement tools to tackle these crimes.

Path Forward Remains Open

Although virtual currencies remain prohibited in Ethiopia, officials say there are preparations for future regulatory decisions.

Amare stated that cryptocurrency transactions must be subject to strict regulation if they are ever legalized. However, if the prohibition continues, he emphasized the importance of having effective enforcement systems and penalties for those who violate the law.

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So far, there have been no documented cases of crypto-related harm in Ethiopia, either from domestic use or international activity. However, authorities remain cautious given global trends and security threats.