Cryptocurrency controversies in Ethiopia

3 min read

The National bank of Ethiopia affirmed that it is illegal to involve in any form of crypto trading in Ethiopia. Is cryptocurrency a hub for criminal financing?

It is one way to retain value. You can think of it as putting your money into gold, real estate, other assets, or a stronger currency, except that this one is virtual. You do not see metal bars, properties, notes, or coins. This revolutionary trading, cryptocurrency, is becoming the new way of storing value and exchanging resources. This peer-to-peer transaction is done without the supervision of a central financial institution like banks.

The many distributed computers around the world validate the cryptocurrency system. It means that no country or government is controlling and manipulating it. This decentralization is the chief reason for the increasing number of crypto traders. All records are kept on a vast virtual ledger where all transactions are registered. Anyone with the will and computing capacity can participate in it.

Millions of transactions are now happening in cryptocurrencies. Stellar, Ripple, Ethereum, and Bitcoin have topped the market. The volume of transactions has ballooned into trillions of dollars. As of the writing of this article, 1 Bitcoin equals 1,270,788.80 Ethiopian birr. This trading has made many billionaires and is drilling into the mainstream finances.

Banned in Ethiopia!

Recently, The National bank of Ethiopia issued a warning against crypto trading. It affirmed that it is illegal to involve in any form of crypto trading. The caution is understandable and shared by many other world governments. Considering the opportunities this tech-era commerce could bring, the national bank has been researching how to implement it. No actions took place following whatever the research found out.

Is cryptocurrency a hub for criminal financing?

Scrutinizing every novel idea is only human and the government’s responsibility. Nevertheless, we should probe intentions closely. Even though the central theme of cryptocurrencies is transparency, immutability, and security, it has faced strong opposition from various parties. Some governments and central banks have continued to take blocking measures. For a country like Ethiopia fighting against financial fraud, however, this nature of the system should have been a motivating factor.

A Harvard study pointed out that high-value cash transaction is usually illegally purposed. As far as spams happen, the digital currency trade is not exempt. But data shows transactions that appear to be illegal have higher percentages in cash exchange than in cryptocurrency trading.

Opportunities too good to miss

Yes, stories of cryptocurrency fraud continue to bombard us. We have all heard of someone so swayed by the allure of investing in promises that they fell into the hands of crooks and lost everything. Crypto scams are technically just high-tech financial deceptions. All investment cautions should not be overlooked here. However, it would be gullible to dismiss opportunities altogether.

Many analysts believe that crypto will uphold the underdeveloped banking system in developing countries. Lack of access to financial services and high inflation rates are primary factors for poverty. Trading through cryptocurrency provides means to financial inclusion. Cryptocurrency lets individuals and nations leapfrog from poverty. How much risk would we take for the colossal opportunities crypto currency provides?

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