Summary
- Ethiopia was ranked 12th globally in terms of crypto adoption in 2025, with bitcoin mining driving much of this growth.
- The government has maintained a largely cautious approach to the development of crypto and blockchain, but as part of wider economic reforms, it is exploring aspects of their development.
- Legislation is in development, but at this stage, there are few tangible details about any proposals.
The factors driving crypto adoption in Ethiopia
Crypto adoption has been slowly increasing in Ethiopia, but the number of users remains small (reported as 1.8 million out of a population of more than 130 million). There is a good degree of digital literacy among its youthful population giving rise to both P2P trading and the use of crypto by some start-ups. In addition, cryptocurrencies are used for remittance payments.
The most popular currencies are bitcoin and Ethereum, with USDT typically used for international transfers.
In the latest crypto adoption index, Ethiopia was ranked 12th globally. The factor that has given the greatest boost to adoption has been bitcoin mining. Ethiopia offers an attractive destination for bitcoin miners because its electricity is among the world’s cheapest (approximately $0.03-0.05 per kWh, which is about half what miners typically pay).
The authorities, although historically cautious in their attitude towards crypto development, took the step in 2022 of selling licenses to take advantage of the oversupply of hydroelectricity. Historically, Ethiopia has sold its excess power to neighbouring countries, including Djibouti and Kenya. It has, however, proven more lucrative to sell mining licenses. In the first 10 months of 2024, the country received $55 million in revenue from these.
In August 2025, however, the provision of further licenses was suspended when the country began to run short of power.
The authorities have said that only ‘stranded’ power – surplus power generated during off-peak periods – goes to mining, but the fact remains that just under half of the country’s population still doesn’t have access to electricity.
Ethiopia’s digital strategy
Since 2020, the authorities have rolled out a digital strategy (with a new phase announced in 2025), which by using digital technologies is aimed at modernizing the country’s public services, improving access to these services, and boosting mobile and internet penetration. A strand of this is financial inclusion (currently in its second phase), which has its own related strategy – the National Financial Inclusion Strategy – aiming to boost access to financial services.
In terms of digital payments, transactions are rising rapidly. As of June 2023, users made payments totaling Birr 4.7 trillion ($82 billion), three times the value recorded in 2022, with the number of digital transactions reaching 1.2 trillion.
The authorities’ attitude to crypto (and blockchain)
Historically, the authorities have taken a cautious stance on crypto’s development. Crypto trading was banned in 2022, but despite this, the government has shown interest in blockchain development and the creation of a CBDC. Ethiopia already uses blockchain for large government payments and some branches of government, including the Network Security Administration (INSA), have been given a mandate to register and control specific crypto operations. As such, a gray area has emerged: the technology to support digital assets and their transfer is developing but transactions are banned.
The decision to offer bitcoin mining licenses seemed out of character, but there is a sense that the authorities’ attitude is shifting. The authorities are taking steps to improve Ethiopia’s financial robustness and develop the financial sector more broadly. The gradual acceptance of crypto can be seen as part of these wider efforts.
As yet, there is no comprehensive legal framework governing digital assets, but this is being developed. As part of moves to improve financial oversight, the country’s Financial Intelligence Service (FIS) is developing regulations to better regulate crypto transactions, with wider legislation expected in 2026.
Details are limited but it’s been reported that the authorities will require crypto platforms to register, and will oblige them to report any suspicious transactions. This is in line with Financial Action Task Force (FATF) rules.
Like many other nations, the authorities seem keen to curtail the problematic aspects of crypto’s development – particularly its misuse by criminal elements – and want to protect domestic monetary stability. Among Ethiopia’s aims are to prevent money laundering and terrorist financing, and more widely, bring the country’s economic laws in this area in line with global financial standards.
In June 2024, the National Bank of Ethiopia (central bank), issued two proclamations as part of wider economic and financial reforms. One laid out the legal framework for a CBDC, and the second focused on the liberalization of foreign investment into the banking sector. The Council of Ministers passed these, following which they went on to the House of Representatives.
CBDC models are reportedly being studied, with a pilot program being considered, possibly modeled on Nigeria’s eNaira launched in 2021.
Timeline of crypto and blockchain developments
2018
The government signed an MoU with cryptocurrency startup, Cardano, aimed at using local developers to apply blockchain technology to Ethiopia’s agritech industry.
2020
A payments instrument issuers directive was endorsed, laying the groundwork for the introduction of digital financial services, including digital wallets.
2021
The National Bank of Ethiopia (NBE) stopped banks from handling crypto transactions.
In April, the authorities began a blockchain-based digital ID scheme.
2022
In June, the NBE declared all crypto transactions illegal.
This made August’s developments surprising, when the country’s Information Network Security Administration (INSA) issued an order requiring all those involved in crypto operations (including transfer and mining activities) to register with it.
INSA also began issuing licenses to domestic and foreign companies to mine bitcoin.
2024
In April, it was reported that the government was interested in developing a CBDC.
In December, the House of People’s Representatives approved the CBDC Proclamation and Banking Business Proclamation (approved by the Council of Ministers in June) aimed at modernizing the financial system and improving the payment ecosystem. As part of this, the central bank was given the authority to issue and regulate a CBDC.
2025
Reports emerged of possible plans to launch a CBDC (the digital birr) in 2026.
In November, the Commercial Bank of Ethiopia (CBE) launched a digital loan service through its CBE Birr mobile application. This offered customers access to loans ranging from 500 to 150,000 birr.
Outlook
Crypto awareness is developing quickly in Ethiopia, particularly among the youth and those working in tech. The government’s attitude is also changing, with the crypto sector regarded as a means of raising revenue and serving as a part of wider financial modernization. As the authorities roll out economic reforms and broaden digital access, crypto and blockchain can be expected to develop, along with consumer protection, greater transparency and oversight, ensuring a more formalized role in the country’s financial future.
