Ethiopia and Cryptocurrency
Ethiopia Cryptocurrency Laws
Regulation of Digital Currencies: Cryptocurrency, Bitcoins, Blockchain Technology
A 2018 study concluded that Ethiopia has a contentious stance with cryptocurrency but simultaneously exhibits signs that it is continually monitoring the situation.[1] To date, Ethiopian regulators have yet to take a public position on cryptocurrencies.[2]
Cryptocurrency Laws – Virtual
In contrast, blockchain technology generally is becoming more common in Ethiopia. In November 2017, experts gathered in Addis Ababa to review a UNECA report that aimed to explore future opportunities for blockchain technology in Africa.[3] Here, Kasirim Nwuke, Chief of the New Technologies and Innovation Section in the ECA’s Special Initiatives Division, said, “We have learned that [Blockchain] is an emerging technology with a breakthrough potential. We have learned harnessing this technology will require huge investments and that careful evaluation by member States and firms is needed not only to determine the suitability of the technology to help mitigate identified needs but also return on investment.”[4]
More recently, the Ethiopian Government signed a memorandum of understanding (MOU) with cryptocurrency startup Cardano.[5] Under this deal, the parties will create a national database of student and teacher IDs that will store educational records and track academic performance.[6] Notably, this is the largest blockchain deal signed by a government.[7] The project is not expected to launch before January 2022.[8]
Some describe the Cardano deal as a “watershed moment for the use of blockchain and the crypto-asset industry.”[9]By providing Ethiopians digital identities, the deal will be a major step towards financial inclusion.[10] Significantly, this is the first blockchain deal in Africa that aligns with the developmental agendas of both the United Nations Sustainable Development Goals and the African Union Agenda 2063 goals.[11]
P.S. Insights on Cryptocurrency Legal Issues
Most jurisdictions and authorities have yet to enact laws governing cryptocurrencies, meaning that, for most countries, the legality of crypto mining remains unclear.
Under the Financial Crimes Enforcement Network (FinCEN), crypto miners are considered money transmitters, so they may be subject to the laws that govern that activity. In Israel, for instance, crypto mining is treated as a business and is subject to corporate income tax. In India and elsewhere, regulatory uncertainty persists, although Canada and the United States are relatively friendly to crypto mining.
However, apart from jurisdictions that have specifically banned cryptocurrency-related activities, very few countries prohibit crypto mining.
Our Freeman Law Cryptocurrency Law Resource page provides a summary of the legal status of cryptocurrency for each country across the globe with statutory or regulatory provisions governing cryptocurrency. The globe below provides links to country-by-country summaries:
Is cryptocurrency legal in Ethiopia?
Do you have questions about cryptocurrency, digital currencies, or blockchain technology?
Freeman Law can help with digital currencies, tax planning, and tax compliance. Contact us now to schedule a consultation, or call (214) 984-3410 to discuss your cryptocurrency and blockchain technology concerns.
[1] Middle Africa Briefing Note | Digital | African crypto regulation, EcoBank.
[2] Middle Africa Briefing Note | Digital | African crypto regulation, EcoBank.
[3] Middle Africa Briefing Note | Digital | African crypto regulation, EcoBank..
[4] https://archive.uneca.org/stories/experts’-meeting-blockchain-technology-use-africa-ends .
[5] Marc Hochstein, Anna Baydakova Ethiopian Education Minister Confirms Cardano Blockchain Partnership, CoinDesk.
[6] Marc Hochstein, Anna Baydakova Ethiopian Education Minister Confirms Cardano Blockchain Partnership, CoinDesk; Iwa Salami Ethiopia’s blockchain deal is a watershed moment – for the technology and for Africa The Conversation.
[7] Iwa Salami Ethiopia’s blockchain deal is a watershed moment – for the technology and for Africa The Conversation.
[8] Marc Hochstein, Anna Baydakova Ethiopian Education Minister Confirms Cardano Blockchain Partnership, CoinDesk.
[9] Iwa Salami Ethiopia’s blockchain deal is a watershed moment – for the technology and for Africa The Conversation; Iwa Salami Ethiopia’s blockchain deal is a watershed moment Quartz.
[10] Iwa Salami Ethiopia’s blockchain deal is a watershed moment – for the technology and for Africa The Conversation.
[11] Iwa Salami Ethiopia’s blockchain deal is a watershed moment – for the technology and for Africa The Conversation.
