On June 9th, it was reported that although the Ethiopian government has banned the trading of virtual currencies, officials from the country’s Financial Intelligence Service (FIS) disclosed that they are actively preparing for the regulation of cryptocurrencies.
The director of the Financial Intelligence Service, Muluken Amare, officially announced this news at the meeting of the East and South African Anti-Money Laundering Organization (ESAAMLG) held in Addis Ababa. At present, the bureau is working hand in hand with the United Nations, Russia and its member states to focus on providing professional training for financial security experts on monitoring and handling illegal virtual currency transactions.
Amare said, “In Ethiopia, virtual currency transactions are not allowed except for the country’s legal tender, the Ethiopian Biel.” But we are still conducting training aimed at dealing with possible unauthorized transactions. He further added that regardless of whether the National Bank of Ethiopia decides to legalize virtual currencies in the future, the current work on related technologies, human resources and professional capacity building is steadily advancing.
Kamal Anwar, the management official of the United Nations counter-terrorism project, pointed out that the illegal uses of virtual assets are extensive. They not only involve terrorist financing but are also closely related to illegal activities such as tax evasion and money laundering. Globally, virtual currencies, due to their anonymity and convenience in transactions, are often exploited by lawbreakers to conceal the source and destination of funds and evade regulatory scrutiny.
Ethiopia has previously explicitly banned virtual currency transactions. In 2022, the National Bank of Ethiopia issued a statement, emphasizing that Bitcoin and other forms of cryptocurrencies are illegal in the country, warning the public not to use them, and stating that it will take strict legal measures against violators. This is mainly because cryptocurrency trading involves many risks, such as the lack of effective supervision of transactions, which can easily lead to financial instability. Its anonymity feature provides convenience for criminals to transfer illegal funds across borders, which may lead to threats to the country’s financial security.
However, despite the official ban on trading, the country has not been inactive in the cryptocurrency field. In 2024, it was reported that 21 Bitcoin miners (19 of which were from China) had reached cost-effective power supply agreements within Ethiopia. The state-owned entity, Ethiopia Investment Holding Company, also signed a $250 million project cooperation memorandum of understanding with Data Center Service, a subsidiary of Western Digital Group in Hong Kong, to develop advanced infrastructure that supports data mining and artificial intelligence training businesses. This indicates that cryptocurrency-related activities have a certain development trend in Ethiopia, and also reflects from the side the necessity of the country’s preparatory work for cryptocurrency regulation.
The training work carried out by FIS this time is expected to cover a wide range of contents. At the technical level, it will involve how to apply advanced monitoring tools and data analysis techniques to track the flow of virtual currency transactions and identify suspicious transaction behaviors. In terms of human resources, emphasis should be placed on enhancing the mastery of knowledge among financial security experts regarding the characteristics of virtual currency transactions and common money laundering methods, and cultivating a professional regulatory talent team. In terms of professional capacity building, we will enhance the study of relevant laws and regulations as well as international regulatory standards to ensure that future regulatory work can be carried out in accordance with laws and regulations and in line with international standards. Through these measures, once there are future policy adjustments or an increase in illegal transactions, Ethiopia will be able to respond promptly and effectively to various problems brought about by cryptocurrency transactions and maintain the stability of the national financial order.
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