Ethiopia takes first step toward a central bank digital currency (CBDC) in a revolutionary economic reform. The country plans to have a legal framework and regulatory sandbox in place for CBDC introduction.
The National Bank of Ethiopia (NBE) has prepared a proclamation that includes the establishment of a legal framework for introducing CBDC.
The policy changes foreseen by the NBE Proclamation include creating a legal framework for a CBDC. Other measures described in the document include increasing the NBE’s capital and creating a legal basis for consumer protection.
The bank also expects that CBDC implementation will require some liberalization of foreign investment in banking. NBE also thinks about a regulatory sandbox for innovative financial solutions.
The Council of Ministers has approved the proclamations and will soon be introduced into the House of Representatives.
Talking about CBDCs may be a next significant step in economic liberalization of Ethiopia. The country already uses blockchain-based digital infrastructure for large government payments.
Several African countries are pushing for crypto adoption. Even such a barrier as low internet penetration can't stop them.
Those experiments aren't always fast and a 100% successful. For example, Nigeria launched its own CBDC called eNaira in 2022.
The Central African Republic adopted Bitcoin as a currency and launched a non-CBDC government cryptocurrency called the Sango. Yet, there are no news on the Sango currency really working, as of now.
Zimbabwe has recently started to use a government-issued gold-based token as the foundation for the introduction of the latest currency.