Ethiopia’a Central Bank Says Business Transactions via Cryptocurrency are Illegal

The government of Ethiopia started working with Cardano Foundation last year. The state has committed to the private blockchain enterprise to make the educational system transparent.

Furthermore, Cardano Foundation is also planning to introduce the peer-to-peer lending system in several African nations with the help of blockchain. However, it seems that the Central Bank of Ethiopia does not see all cryptocurrencies as the same.

Recently, the National Bank of Ethiopia has passed a new legislature that has made Bitcoin an outlaw currency in the region. To be precise, the Central Bank has issued a notification in the region that declares that any transactions made with Bitcoin in the region are deemed illegal. The report was recently covered by Fana Broadcast Corporate, a local media outlet.

Bitcoin Payments can Undermine the Value of the Local Fiat Currency, Says Central Bank

The latest statement issued by NBE officials suggests that the country can face financial and economic set back by allowing Bitcoin payments. The officials further explained that legalizing Bitcoin payments can undermine the value of the local fiat currency called Birr. The announcement of the NBE has gathered a lot of attention from the local and international media houses.

A related statement of the NBE suggests that some crypto investors are using Bitcoin for making informal business transactions and money laundering. On the other hand, the Commercial Bank of Ethiopia also issued a statement clarifying that several corporations are already using Bitcoin for commercial transactions.

It is worth noting that Octagon, a cybersecurity firm originating from Ethiopia, has recently decided to convert all its liquid assets and balance sheet into Bitcoin.

Furthermore, the firm is also encouraging its consumers to make payments in Bitcoin by offering a 50% discount. Meanwhile, the NBE and CBE have issued clashing statements about the usage of Bitcoin payments in the region.

NBE has responded to the commercial goods and service purchases statement of CBE by claiming that the number of Bitcoin payments in the region is increasing at an alarming rate.

Meanwhile, the inflation reports on the Year-to-Year rate suggest that the country is suffering from a 36% hike. With the crippling impact of inflation, more consumers in the country are likely to switch to cryptocurrencies as a hedge against inflation.

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