Ethiopia's National Bank Moves Towards Economic Reform and Crypto Adoption
Summary:
The National Bank of Ethiopia (NBE) develops two proclamation plans for economic reform, including the introduction of a central bank digital currency (CBDC). These proclamations will move for approval in the House of Representatives after being accepted by the Council of Ministers. The proclamations encompass increasing the NBE's capital and safeguarding consumers, among other policies. Ethiopia is also working on economic liberalization, including abolishing the state monopoly on mobile money services and using blockchain for government payments. Despite hurdles, such as low internet connectivity, crypto adoption is progressing in various African nations.
In a move towards economic reform, the National Bank of Ethiopia (NBE) has implemented two proclamation plans, one of which encompasses the creation of a central bank digital currency (CBDC). Following approval by the Council of Ministers, these policies will be presented to the House of Representatives for further review. The proposed changes involved within the NBE Proclamation include setting the legal groundwork for a prospective CBDC, increasing the capital of the NBE, and establishing a lawful framework for safeguarding consumers. In tandem, the Banking Business Proclamation attends to the liberalization of foreign bank investments, implements remedial actions towards troubled banks, and constructs a regulatory sandbox suited for innovative fiscal solutions.
These newly unveiled proclamations form a vital part of the Homegrown Economic Reform Agenda, a governmental initiative. It was already pointed out by The Reporter, an Ethiopian independent newspaper, in April, that the government was exploring the idea of a CBDC, with a study set to instigate in June. There were no specific details about their plan to join the Cross Border Payment System by December 2022, however.
In recent times, Ethiopia has taken significant strides towards economic liberation, which includes abolishing the state hold on mobile money services, and the utilization of blockchain technology for processing major government payments.
On another note, the integration of cryptocurrency is rapidly progressing in numerous African nations, despite obstacles such as inferior internet connectivity. However, not all attempts at incorporating crypto have been fruitful. The Central African Republic, in spite of positioning Bitcoin as the country's currency and launching a non-CBDC state-backed cryptocurrency known as Sango, achieved only minimal success. While the official website for Sango remains inaccessible, digital currencies are still outlawed in Ethiopia. Nevertheless, several data mining firms have sought to harness Ethiopia's inexpensive electric power for crypto mining. Additionally, there were plans to bring in the Web3 Fuse payment infrastructure into the country. The exploration of CBDCs is ongoing in at least 18 African nations. Nigeria's journey with its eNaira, launched as the world's second operational CBDC, has been a mixed bag. Zimbabwe opted for a government-sanctioned gold-backed token as the basis for unveiling its novel currency.
Published At
6/18/2024 12:24:15 AM
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