Ethiopia extends currency clampdown to Crypto, bans Birr-paired P2P trading

The National Bank of Ethiopia (NBE) has prohibited Birr-denominated peer-to-peer (P2P) cryptocurrency transactions conducted through trading platforms and exchanges, widening its oversight of capital flows tied to the local currency.

In a public notice, the central bank said any Birr-paired P2P crypto activity is illegal unless explicitly authorised. The directive brings digital asset trading into the same regulatory focus that has reshaped other informal financial channels over the past year.

This latest directive fits into a policy direction that has been unfolding for months. After targeting informal remittance networks in late 2025, the central bank is now drawing a line around crypto-linked currency flows. The pattern is consistent: any channel that sits outside formal oversight and touches the birr is being brought back under regulatory control.

“Under the current regulatory framework, the use of Birr-paired P2P arrangements on trading platforms, exchanges, or similar services and products is not permitted unless explicitly authorised by the National Bank of Ethiopia. Any form of Birr-denominated P2P trading or exchange involving cryptocurrencies is also prohibited.”

Closing another currency exit

Across several African markets facing currency pressure, crypto P2P platforms have functioned as parallel liquidity rails. Traders often use them to purchase stablecoins or other digital assets at rates closer to open-market pricing, sidestepping official foreign-exchange windows.

Blocking Birr-linked P2P trades narrows one of the remaining channels through which local currency can be converted into digital assets and moved offshore.

The central bank warned that such markets carry structural risks tied to volatility, price manipulation and weak compliance safeguards.

“While global interest in digital and virtual assets continues to grow, the public is advised to exercise caution and make well-informed decisions. These markets are often characterised by significant volatility, exposure to foreign exchange price manipulation, fraud and scams, operational risks, and the absence of key safeguards such as Anti-Money Laundering and Combating the Financing of Terrorism protections commonly found in regulated financial systems.”

The NBE also referenced instances where crypto platforms restricted withdrawals or experienced technical failures, limiting users’ access to funds.

Officials say a formal regulatory framework for digital assets is in development.

“The National Bank of Ethiopia is actively working toward a comprehensive regulatory framework that will enable safe and orderly participation in emerging digital asset technologies. This process includes ongoing consultations with international peer regulators and domestic stakeholders to ensure alignment with global best practices while preserving financial stability and the integrity of the national payment system. Until such a framework is formally introduced, Birr-paired P2P cryptocurrency transactions remain prohibited.”

Until that framework is introduced, Birr-linked crypto trading remains prohibited.

“The National Bank of Ethiopia reaffirms its commitment to consumer protection and to maintaining a stable and sound financial system as technological innovation continues to evolve.”