Ethiopia takes first step towards CBDC through economic reforms.
The National Bank of Ethiopia has prepared two proclamations as part of its economic reform plan. One of them involves the establishment of a legal framework for the introduction of the Central Bank Digital Currency (CBCC).
Policy changes foreseen in the National Bank Proclamation include creating a legal framework for the CBC “as necessary”, as well as increasing the capital of the National Bank and creating a legal basis for consumer protection. The accompanying Banking Business Proclamation addresses the liberalization of foreign investment in banking, corrective measures regarding “problem” banks, and the creation of a regulatory sandbox for innovative financial solutions.
The Council of Ministers has approved the decrees and it will be submitted to the House of Representatives soon.
The central bank has extensive reforms in mind
The proclamations are part of the government's domestic economic reform agenda. A reporter from the privately owned Ethiopian newspaper reported the government's interest in April. It is also said that research will start in June. The national bank aims to join the “cross-border payment system” by December, he added. He did not give any details about the system.
Related: IOHK partners with Ethiopian government to improve education system.
Ethiopia has taken steps towards economic liberalization, including ending the government's monopoly on mobile money services. The country already uses blockchain-based digital infrastructure for large government payments.
Africa has a mixed experience with crypto.
Despite barriers such as low internet access, crypto adoption is progressing in many African countries. All attempts to promote crypto have been unsuccessful. In particular, the Central African Republic adopted Bitcoin as its currency and launched a non-CBDC government cryptocurrency Sango with limited success. The Sango Currency website is not active at the time of this writing.
Digital currencies are illegal in Ethiopia, despite the licensing of “dozens” of data mining firms trying to take advantage of the country's cheap electricity. There were plans to introduce the Web3Fuse payment system there.
At least 18 African countries are researching CBDCs. Nigeria in the year In 2022, it had the opportunity to join eNaira, which launched the world's second live CBCC. Zimbabwe used a government-issued gold-based token as the basis for its latest currency introduction.
Magazine: Digital-Nomads Crypto Hub in South Africa: Cape Town, Crypto City Guide
