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July 24 2026
The National Bank of Ethiopia has reaffirmed a broad, prohibition-first stance on virtual assets. Here is what the Notice covers, how it fits within Ethiopia's wider monetary, payments, foreign-exchange, capital-markets and AML/CFT framework, and what businesses should do now.
On 23 July 2026, the National Bank of Ethiopia ("NBE") issued a Public Notice on Virtual Assets (the "Notice"). It reiterates that the use, purchase, sale, exchange, transfer, trading, settlement and facilitation of transactions involving virtual assets are prohibited unless expressly authorized by the NBE under the existing legal framework. The Notice is deliberately broader than a warning about cryptocurrency: it reaches digital representations of value capable of electronic trade, transfer or exchange, or use for payment, investment or a similar purpose.
The regulated conduct is equally broad. The Notice identifies virtual asset–fiat exchange, virtual asset–virtual asset exchange, transfer, safekeeping or administration (including instruments enabling control), and financial services connected with an issuer's offer or sale. Exchanges, brokers, custodians, wallet operators, over-the-counter desks, token issuers, payment facilitators and other intermediaries are therefore within the clearest area of exposure. "Facilitation" also directs attention to substance over contractual labels: calling a service "technology," "consulting" or "peer-to-peer" does not resolve the legal analysis if the service makes a prohibited transaction possible.
The Notice should not, however, be treated as though it were a new proclamation containing a complete licensing, offence and penalty regime. It expressly relies on the existing legal framework. Its immediate significance is that it states the NBE's regulatory perimeter and expected compliance position; the precise legal consequence in a particular case must still be traced to the applicable proclamation, directive, licence condition and facts. The phrase "unless expressly authorized" is pivotal. Silence, a general business licence, registration with another regulator, or access to a regulatory sandbox is not equivalent to NBE authorization.
The National Bank of Ethiopia Proclamation No. 1359/2025 supplies the principal institutional foundation. The NBE's objectives include price stability and the soundness and stability of the financial system (Article 5). Its powers extend to monetary and foreign-exchange policy, macroprudential measures, the licensing and supervision of financial institutions, regulation of market conduct, and the operation and supervision of payment, clearing and settlement systems (Article 6). Article 6(21) also permits a regulatory-sandbox framework for testing innovative financial services; the provision creates a controlled regulatory mechanism, not a general exemption for unapproved activity.
The same Proclamation places the Birr at the centre of domestic monetary arrangements. The Birr is Ethiopia's monetary unit and legal tender; monetary transactions are presumptively expressed, recorded and settled in Birr unless the NBE authorizes otherwise (Article 35). The NBE alone may issue legal tender (Article 36). A privately issued token does not acquire legal-tender status because it is technologically transferable, denominated by reference to a currency, or accepted by a particular network.
The National Payment System Proclamation No. 718/2011, as amended by Proclamation No. 1282/2023, requires NBE authorization for payment-system operation and payment-instrument issuance. Under the amended law, a payment instrument is issued against receipt of an equivalent amount in Ethiopian Birr. "Electronic money" is a monetary value representing a claim on its issuer, electronically stored, issued against receipt of equivalent Birr funds, accepted by persons other than the issuer and redeemable in cash. Licensing and authorization are further governed by Payment Instrument Issuer Directive No. ONPS/09/2023, as amended by Directive No. ONPS/10/2025.
This is the most important limiting principle against an overbroad reading of the Notice: not every digital record of value is thereby prohibited. A lawfully issued, Birr-funded, redeemable e-money product operating within an NBE authorization is part of the regulated national payment system. By contrast, a transferable token or "stablecoin" does not become authorized e-money merely because it is price-stable, asset-backed or marketed for payments. Its issuance model, redemption claim, reserve arrangements, transferability and regulatory authorization must satisfy the payment laws, and the virtual-asset restriction remains relevant unless the NBE has expressly cleared the activity.
Article 39 of Proclamation No. 1359/2025 provides that foreign-exchange transactions may be conducted only with banks or authorized dealers, or under special NBE permission, subject to directives. The Foreign Exchange Directive No. FXD/01/2024, as successively amended through 2026, governs authorized channels, accounts, payments and transfers. A virtual asset is not automatically "foreign currency" merely because it is traded globally: the statutory definition of foreign currency turns on legal-tender status abroad and NBE acceptance. Nevertheless, a virtual asset–fiat conversion, offshore funding arrangement or cross-border transfer may engage foreign-exchange controls in addition to the Notice. Using a virtual asset as an intermediate settlement layer is not a safe harbour from rules governing the underlying inflow, outflow or payment.
The Capital Market Proclamation No. 1248/2021 and the Ethiopian Capital Market Authority ("ECMA") rules may apply concurrently where a token represents an investment, ownership interest, debt, profit right or comparable financial claim. Article 2(19) of the Capital Market Service Providers Licensing and Supervision Directive No. 980/2024 defines "digital assets" broadly as things in digital form having value, ownership and usage rights, and treats digital assets as securities in line with Article 2(62)(g) of the Proclamation. Public offerings and trading also engage the registration and disclosure framework, including Directive No. 1030/2024.
The NBE and ECMA perimeters are therefore cumulative, not alternative. A token may be a "digital asset" or security for capital-market purposes and also fall within the NBE Notice because it is electronically traded, transferred or used for investment. ECMA licensing or securities registration should not be assumed to substitute for express NBE authorization; conversely, NBE authorization would not by itself satisfy capital-market requirements. The controlling analysis is functional and may require coordinated clearance from both regulators.
The Prevention and Suppression of Money Laundering and Financing of Terrorism Proclamation No. 780/2013, as amended by Proclamation No. 1387/2025, reinforces the risk analysis without itself supplying market authorization. The amendment broadens "property" or "fund" to encompass intangible assets and electronic or digital documents and instruments evidencing title or an interest, and includes digital financial service providers within the definition of financial institution (amended Article 2). Customer due diligence, beneficial-ownership inquiry, recordkeeping, suspicious-transaction escalation and cooperation with the Financial Intelligence Service remain relevant wherever the statutory conditions apply.
Virtual assets can increase exposure to pseudonymous transfers, layering, fraud proceeds and sanctions or terrorism-financing risks, but illegality should not be inferred from technology alone. The predicate facts remain decisive. Similarly, the Computer Crime Proclamation No. 958/2016 may apply to fraud, unauthorized access, interference, identity misuse or other computer-enabled conduct; it does not convert every virtual-asset interaction into a computer crime. These laws operate alongside, rather than replace, the financial-regulatory prohibition.
| Issue | Legal reading | Practical consequence |
|---|---|---|
| Licensed e-money | Digital form alone is not determinative. Birr-funded, redeemable e-money issued within an NBE authorization belongs to the regulated payment system. | Verify the exact licence, product approval, reserve and redemption terms. |
| Stablecoins and investment tokens | Transferability and use for payment, exchange or investment ordinarily bring the product within the Notice; backing or denomination does not create authorization. | Do not launch, list or settle without written NBE clearance and, where relevant, ECMA compliance. |
| Custody and wallet technology | Safekeeping, administration and instruments enabling control are expressly named. Pure software questions depend on functionality and the provider's role in facilitation. | Map control of keys, transaction initiation, fee flows and user intermediation. |
| Mining or validation | The Notice does not identify computation, mining or validation as a stand-alone category. Transfer, sale, custody or conversion of outputs is separately captured, and other investment, energy, tax and FX rules may apply. | Analyse the full operating and monetization chain; do not treat a mining approval as trading permission. |
| NFTs, points and closed-loop value | Labels are inconclusive. Transferability, marketability, redemption, payment or investment use and third-party acceptance determine risk; the Notice provides no product-by-product safe harbour. | Seek a written classification where the product approaches transferable value. |
| Offshore platforms and passive holdings | Offshore execution does not eliminate an Ethiopian nexus. The Notice clearly covers transfers and use, but does not separately state a rule for passive possession. | Do not infer permission to liquidate, transfer or use; those acts require specific advice and authorization analysis. |
The Notice confirms that Ethiopia remains a prohibition-first jurisdiction for virtual-asset activity, subject only to express NBE authorization. Its central contribution is breadth: the perimeter is not confined to cryptocurrency trading and extends to transfer, custody, administration, settlement, issuer-related financial services and facilitation. At the same time, careful legal classification remains essential. Licensed Birr e-money is not synonymous with a virtual asset; a virtual asset is not automatically foreign currency; and a token may attract capital-market, AML/CFT, computer-crime and other laws without those regimes supplying the NBE authorization the Notice requires.
For businesses and investors, the prudent question is therefore not simply, "Is this crypto?" It is: what value is represented, who issues or controls it, how it is funded and redeemed, what rights it confers, how it moves, which regulated service is performed, and which authority has expressly approved that service? Until a more detailed authorization regime or product-specific guidance is issued, written clearance and disciplined perimeter analysis are the soundest safeguards.
DABLO Law Firm LLP advises banks, fintechs, payment providers, technology companies, investors and issuers on Ethiopian financial regulation, product structuring, licensing, capital-markets compliance and regulatory engagement.
Disclaimer. This legal insight is provided for general information as at 23 July 2026. It is not legal advice and does not create a lawyer–client relationship. The application of Ethiopian law depends on the facts, the governing authorizations and subsequent regulatory measures. Specific advice should be obtained before acting.
