Ethiopia to Finalize Crypto Framework by 2025, Bans Payments

Coin WorldMonday, Jun 16, 2025 1:47 am ET
2min read

Ethiopia has been cautiously approaching cryptocurrency regulations, with a framework for digital assets expected to be fully developed by 2025. The

of Ethiopia (NBE) oversees financial regulations, including crypto policies, to maintain financial stability and prevent illegal transactions. The country does not endorse cryptocurrencies for transactions but is developing a framework for digital assets. Compliance with Anti-Money Laundering (AML) and Know Your Customer (KYC) principles is required for licensed operators.

Key regulatory institutions involved in Ethiopia's cryptocurrency framework include the National Bank of Ethiopia (NBE), which oversees financial regulations including crypto policies, the Ethiopian Capital Markets Authority (ECMA), which oversees crypto assets related to securities, and the Innovation and Information Technology Ministry, which is concerned with the issuance of national regularization of blockchain endeavors.

Historically, Ethiopia had no regulated crypto laws, leading to unmonitored usage. In 2022, the

issued advisories against dealing in cryptocurrencies due to financial risks. However, by 2024, the government accepted blockchain technology, leading to the formulation of regulated terms. Milestones include the 2022 ban on crypto for payments but allowance for blockchain exploration, the 2024 introduction of licensing for crypto mining firms, and the 2025 clarification of AML/KYC requirements for crypto businesses by the NBE.

Ethiopia’s regulatory framework for cryptocurrencies is structured around key authorities such as the NBE, which prohibits crypto payments but regulates mining, and the ECMA, which oversees security tokens if classified as financial instruments. Licensing and registration are required for crypto mining and exchanges, with mandatory AML and KYC requirements for licensed crypto businesses. Crypto mining profits are taxed as corporate income, but there is no clear capital gains tax for individual traders yet. Initial Coin Offerings (ICOs) and Security Token Offerings (STOs) are not officially recognized and are treated as high-risk investments.

Ethiopia’s crypto policies include the prohibition of crypto payments, the allowance of Bitcoin mining under strict regulations, the study of a central bank digital currency (CBDC) called the “Digital Birr,” and penalties for breaching crypto rules. The country is also exploring blockchain applications in agriculture and land registry systems, with a cautious approach towards blockchain developments while restricting cryptocurrency payments.

Notable challenges in Ethiopia’s crypto sector include regulatory gaps in decentralized finance and peer-to-peer trading, enforcement difficulties due to the anonymity of blockchain, and public skepticism about digital assets. These obstacles create a confusing situation where innovation must work through unclear regulations and public skepticism.

By the end of 2025, changes will be visible in the cryptocurrency space in Ethiopia. The NBE has enforced stricter regulations regarding crypto mining, making it a license and regulatory requirement to comply with energy and financial regulations. Crypto payments remain illegal, but there are indications that the government may progressively shift its stance if market stability improves and financial risk safeguards are established. Ethiopia’s decisions will greatly determine the acceptance of cryptocurrencies in East Africa, with a prospective digital birr (CBDC) and blockchain pilots under construction signaling gradual openness to financial innovations while maintaining rigid control.

Investors must navigate strict rules while watching for future reforms in Ethiopia’s crypto landscape. The country’s approach to crypto innovation is cautious, with a focus on reaping the benefits of blockchain while limiting financial risks. The potential Digital Birr and blockchain pilots signal gradual openness, and investors should stay informed as Ethiopia’s crypto landscape could shift as technology and policies advance.