Saros (saros) 
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Ethiopia’s Financial Intelligence Service (FIS) has announced its plans to regulate virtual currencies, despite their continued ban under current Ethiopian law. This move signals the country’s growing recognition of the challenges and risks posed by digital assets in the financial sector.
Efforts to Address Virtual Currency Risks
The announcement was made by FIS Director Muluken Amare during a meeting of the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) in Addis Ababa. The event brought together financial security officials from across the region to discuss the growing risks associated with virtual currencies, including their potential misuse for illegal activities such as money laundering, tax evasion, and the financing of terrorism.
To effectively tackle these challenges, the FIS is collaborating with international partners, including the United Nations, Russia, and member states of ESAAMLG. Training programs are being conducted to equip financial investigators and intelligence units with the skills necessary to detect, monitor, and respond to illegal activities involving cryptocurrencies.
Regional Concerns Over Misuse of Cryptocurrencies
One of the primary drivers behind Ethiopia’s push for regulation is the regional concern over the misuse of virtual currencies by terrorist organizations. According to Muluken Yirga, a senior legal advisor to ESAAMLG, groups such as Al-Shabaab, Al-Qaeda, ISIL, and Daesh are increasingly leveraging cryptocurrencies to bypass traditional financial systems, making it harder for authorities to trace illicit transactions.
“There are different terrorist organizations operating in our region, including Al-Shabaab, Al-Qaeda, ISIL, and Daesh. These groups are increasingly using virtual currencies to raise and transfer funds,” said Muluken Yirga.
Current Legal Status of Cryptocurrencies in Ethiopia
Although crypto trading remains officially banned in Ethiopia, there is speculation that some transactions might still be occurring. Director Muluken Amare emphasized that not all virtual currency transactions are inherently illegal, unless they are tied to activities such as terrorism financing or fraud.
“As crypto technology is still new, some transactions may be occurring. That said, it cannot be assumed that all such transactions are illegal. The official currency of Ethiopia is the Birr, and any virtual transactions conducted in other currencies are not authorized. If such transactions are linked to crimes such as terrorism or other illegal activities, investigations will be carried out accordingly.”
Preparing for the Future of Cryptocurrency Regulation
Whether Ethiopia eventually legalizes virtual currencies or maintains its current ban, officials are prioritizing the need for robust mechanisms. These mechanisms will either regulate cryptocurrencies effectively or enforce existing prohibitions to safeguard the financial system from potential risks.
The ongoing collaboration with international partners and the focus on capacity-building for financial intelligence units reflect Ethiopia’s commitment to staying ahead of emerging threats in the digital financial landscape. With the rise of cryptocurrency adoption across Africa, these measures could play a pivotal role in shaping the country’s stance on virtual assets in the years to come.
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