The National Bank of Ethiopia said it is preparing a regulatory framework for digital assets while maintaining a ban on birr-denominated peer-to-peer cryptocurrency transactions, as authorities move to tighten oversight of virtual asset activity in the absence of formal rules.

In a public notice issued on Friday, the central bank said the use of birr-paired peer-to-peer arrangements on trading platforms, exchanges, or similar services is not allowed unless explicitly authorised by the regulator. 

The restriction applies to any form of cryptocurrency trading conducted in Ethiopian birr, including transactions facilitated through online peer-to-peer marketplaces.

The bank said the prohibition remains in force until a comprehensive regulatory structure governing digital asset activity is introduced. Officials indicated that work is under way to develop rules that would allow participation in emerging financial technologies under controlled conditions while protecting the stability of the financial system and the integrity of the national payment infrastructure.

Interest in cryptocurrencies and other virtual assets has been rising in Ethiopia despite the lack of an approved legal framework. The central bank warned that transactions conducted through unregulated platforms expose users to risks including fraud, price manipulation in foreign exchange markets, operational failures, and the absence of safeguards related to anti-money laundering and counter-terrorism financing standards.

The central bank said consultations with international regulators and domestic stakeholders are ongoing as part of efforts to align future rules with global standards while preserving financial stability. Until the new framework is formally adopted, birr-paired peer-to-peer cryptocurrency transactions will remain prohibited.