The Central Bank of Ethiopia (CBE) has shifted its approach to crypto, moving from a ban to regulation. Now, all crypto exchanges in the country must register with the cybersecurity agency or be penalized. By implementing regulations and oversight, the government can enhance its ability to protect the public from the risks linked to unregulated crypto activities.
Ethiopia Now Embraces Crypto
In June 2022, the CBE stated that conducting cryptocurrency business in the country was against the law. The apex bank cited concerns about financial stability and money laundering.
However, fast-forward three months after the warning was issued, it appeared that Ethiopia had changed its stance on this matter.
Shifting from the ban, the country now requires crypto businesses to register with its cybersecurity agency, the Information Network Security Administration (INSA) in order to fall under proper regulation.
This change in stance occurred due to the ongoing expansion of the crypto market. Additionally, the Ethiopian government acknowledged the advantages of crypto assets in cross-border payments and digital identity transformation.
Ethiopia, being the second-most populous nation in Africa with a population of 123 million people has recorded a rise in crypto adoption with over 1.8 million users.
Furthermore, developers, entrepreneurs, and officials are delving into the technology behind Bitcoin (BTC) for wider uses. This growing embrace is hinged on the hope of regulating crypto to guarantee stability and protect consumers.
Crypto Adoption In Africa
Despite crypto adoption in Africa being slower, Ethiopia is quickly closing the gap with leading countries like Nigeria, Kenya, South Africa, Egypt, and Central African Republic.
The rest of the African countries are hesitant to embrace crypto due to regulatory challenges, risks like fraud, limited understanding of the tech, and concerns about the impact on national currencies and financial systems.
In May, Uganda cracked down on payment providers enabling crypto transactions nationwide after around 5,000 people lost about $2.7 million in Ponzi schemes.
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