Ethiopia Crypto: Sub-Saharan Stablecoin Series
Selam, gentle reader! Ethiopia’s financial story is as rich and layered as a cup of traditional buna. This is a nation where state-owned banks still reign, half the population is unbanked, and villagers trade livestock in open-air markets – yet smartphones and digital wallets are slowly making inroads. As we continue our Sub-Saharan stablecoin journey, I find myself in the land of thirteen months of sunshine. The question on my mind: could stablecoins offer Ethiopians a ray of hope amid tightly controlled finance and birr shortages?
If you’re just joining us, catch up with our earlier stops in Zimbabwe, Zambia, Mozambique, Kenya, Namibia, Nigeria, and South Africa, or start from the series introduction for context. Now, እንቅናቄ (welcome) to Ethiopia – let’s dive in.
Vital statistics
Population (2025): ~135 million; median age ~19; ~22% urban
GDP (2025): ~US $117.5 billion (nominal); ~US $484 billion (PPP)
Growth: ~8.4% in FY 2024/25 → 8.9% projected FY 2025/26
Inflation: ~30% (2019–2023) down to ~13% (Mar 2025); ~10% expected in 2025/26
Policy rate: 15.00% (benchmark interest, June 2025)
Local currency: Ethiopian Birr (ETB) – gradual float since 2023 (official ≈ 137 ETB/$, parallel ≈ 174 ETB/$ in Aug 2025)
Industries: Agriculture (coffee, livestock, grains), construction & infrastructure, manufacturing (textiles, leather), resources (gold, energy), food processing, tourism
Digital access: ~19% internet penetration; mobile phone ownership ~75% (mostly basic phones); rural connectivity lags
Mobile money: Telebirr (Ethio Telecom) ~34 million users (2023); M-Pesa (Safaricom) launched 2023 (10+ million users by 2024); trillions of ETB in annual transactions
A state-guided economy with an inclusion gap
Ethiopia’s economy has long been a state-guided affair. Major banks are government-owned or tightly regulated, and until recently no foreign banks could operate. The result? Financial inclusion remains low despite recent gains – only about 46% of Ethiopian adults have any bank account. Rural communities (around 78% of the population) often live hours from the nearest bank branch. Many folks still stash cash at home or join iqub rotating savings groups. In this country of 135 million, banking is an urban luxury and credit a scarce commodity. Mobile money was late to the party here: neighboring Kenya had M-Pesa since 2007, but Ethiopia only launched a similar service in 2021. The government’s telecoms monopoly rolled out Telebirr, signing up tens of millions almost overnight, yet usage is still catching up – just 5% of Ethiopian account-holders use mobile money, compared to one-third across Africa. The upshot is a huge informal economy where cash is king and mattresses double as vaults.
This urban–rural divide and low financial inclusion set the stage for alternative solutions. When only half of adults can access formal finance – with poorer and less-educated citizens left far behind – the idea of digital dollars on a phone starts to sound intriguing. After all, nearly everyone can understand the value of a US dollar, even if they don’t trust banks. But can Ethiopia’s tightly controlled financial system make room for crypto experiments? To answer that, we need to look at how money moves into and out of this country.
Mobile money and the remittance lifeline
For many Ethiopian families, salvation comes from a son or daughter working in Washington or Dubai. The Ethiopian diaspora is massive and generous – remittances hit a record $6 billion in 2023/24, pouring vital hard currency into the economy. These inflows dwarf foreign aid and help keep households afloat (and the central bank’s coffers less empty). However, sending money home through traditional channels is costly and cumbersome. Fees of 7–8% per transfer are common, and official exchange rates often shortchange recipients by 25–40% due to Ethiopia’s multi-tiered forex system. No wonder many abroad resort to hawala networks – the informal brokers who’ll deliver birr in Addis Ababa for dollars in Minneapolis – to get a better rate.
Enter mobile money as a potential game-changer. Ethio Telecom’s Telebirr now claims over 50 million users, and Kenya’s M-Pesa stormed into Ethiopia in 2023, signing up 10+ million users within a year. These services are bringing basic financial services – transfers, bill payments, even micro-loans – to anyone with a phone, without needing a bank account. Still, it’s early days. Unlike Kenya (where M-Pesa processes ~60% of GDP), Ethiopia’s mobile money usage is still relatively modest. But growth is explosive: Telebirr has processed trillions of birr in digital transactions and is expanding into diaspora remittances. In late 2024 the central bank even launched a campaign (“Debo”) to channel more diaspora funds through formal e-wallets, promising better exchange rates and less hassle.
All this sets the foundation for stablecoins. If Auntie Aster in Los Angeles can load up digital dollars and instantly send them to a Telebirr wallet in Lalibela – at a fraction of today’s cost – that’s a huge win. The need is clear: Ethiopia has Africa’s highest remittance costs and a voracious hunger for USD. Every month, families line up at Western Union or banks, collecting envelopes of dollars that they then must exchange at poor rates. Stablecoins offer to cut out those middlemen. Mercy Corps even ran a pilot in neighboring countries where sending funds via a USDC stablecoin slashed fees from ~30% to near zero. For Ethiopians abroad, who often lose a big chunk of their support money to fees, this is like finding an extra chicken in the coop.
Crypto’s quiet emergence (officially banned, unofficially booming)
Given this backdrop, you might think Ethiopia would embrace crypto innovation. The reality is more cautious. In June 2022, the National Bank of Ethiopia put out a stern notice declaring cryptocurrency trading illegal, warning that only the birr is legal tender. Officials fretted (not unreasonably) about scams, money laundering, and loss of monetary control – concerns echoed across African capitals. But Ethiopians are nothing if not resourceful. By late 2022, the government’s cybersecurity agency INSA took a different tack: it required all crypto operators to register with them, hinting at a shift from outright ban to regulated tolerance. This created a curious grey area – the central bank saying “no crypto transactions,” while another agency quietly logs crypto businesses. Classic Ethiopian bureaucracy, if you ask me.
On the ground, crypto activity has been largely underground but growing quickly. It’s often said that necessity is the mother of adoption, and Ethiopia’s economic strains are proving the case. Chainalysis data (2024) showed Ethiopia ranked #26 worldwide in crypto adoption, with the fastest-growing stablecoin usage in Africa – 180% year-on-year growth in retail stablecoin transfers. What’s driving this? Look no further than the birr’s slide. In mid-2024, as the government loosened some currency controls to appease the IMF, the birr shed 30% of its value practically overnight. That sent anyone with savings scrambling for dollars – and for the tech-savvy, USDT on a phone was easier to obtain than physical $100 bills. By 2025, informal Telegram and WhatsApp groups in Addis were buzzing with offers to trade birr for Tether or USD Coin. “Digital dollar available, best rates!” one ad proclaims, catering to importers desperate to pay suppliers abroad.
There are also whispers of Bitcoin mining farms humming on the outskirts of Addis Ababa, capitalizing on Ethiopia’s cheap hydroelectric power. Indeed, the government quietly allowed some mining operations to register through INSA, seeing an opportunity to earn hard currency via exported hash power. Imagine: while one arm of the state banned crypto, another arm encouraged Bitcoin miners to plug into the grid – likely because miners must convert their rewards to dollars, which ultimately bolster Ethiopia’s forex reserves. The irony isn’t lost on us.
Officially, Ethiopia is now tiptoeing toward a legal framework. In mid-2024, the Council of Ministers approved a draft law to introduce a CBDC (central bank digital currency) – effectively a digital birr. The central bank is studying how a government-backed digital coin might coexist with (or crowd out) private crypto. But a retail CBDC will take time to roll out, and its success is uncertain (witness Nigeria’s struggling eNaira). Meanwhile, Ethiopians aren’t waiting. An estimated 1.8 million+ people in Ethiopia already use cryptocurrency in some form, despite the legal cloud. Most are likely dabbling in small peer-to-peer trades or using it as a workaround to get dollars in or out. It’s crypto with Ethiopian characteristics: low-key, peer-informed, and driven by practical needs rather than hype.
Foreign exchange: strict controls and digital hope
To understand Ethiopia’s crypto appeal, you must understand its forex crunch. The birr has been on a steady decline for years, and until 2023 the central bank fixed an official rate that almost nobody could actually get. A black market thrived in alleyways and Telegram chats, where the dollar fetched much more birr than the bank rate. Under a 2023 IMF program, Ethiopia began gradually floating the birr – effectively devaluing it in steps. Even so, by mid-2025 the parallel market rate was ~40% weaker than the official rate (birr 174 vs 137 per US$). Businesses complain of limited access to foreign exchange – importers wait months for bank approval to buy dollars, factories can’t import raw materials, and students struggle to pay foreign tuition. The government rations FX like water in a desert, prioritizing strategic areas and state-linked companies. This has spawned an ecosystem of money changers and brokers, and now, stablecoins as a 21st-century conduit.
The government’s stance toward all this is conflicted. On one hand, they crave foreign currency – hence the push to attract remittances and export earnings (coffee, gold, etc.) through official channels. They’ve even banned unlicensed remittance operators and warned that funds sent “illegally” might be seized. On the other hand, they know people will find a way. By acknowledging crypto and preparing regulations (instead of jailing every Bitcoin user), Ethiopia’s regulators hint that they’d rather keep an eye on the crypto genie than pretend it doesn’t exist. The planned digital birr (CBDC) is one way to offer a “safe” digital currency – though it remains to be seen if people will trust a government stablecoin any more than the paper birr.
For now, the National Bank has maintained a conservative line: no crypto trading, period. But behind closed doors, officials are learning from Kenya, Nigeria, and South Africa’s experiences. They’ve observed how outright bans (like Nigeria’s) tend to backfire, driving volumes underground without reducing interest. So Ethiopia is likely to pursue a sandbox approach: licensing a few exchanges or fintech startups under strict conditions once a legal framework is in place. In early 2024 the tech minister even launched crypto regulation tests, calling crypto a driver for inclusion and innovation. For a government known to be cautious, that’s a notable shift.
Use cases: diaspora dollars, traders, and savers
Even with ambiguity in the law, real Ethiopians are already finding creative uses for stablecoins. Here are a few scenarios popping up on the ground:
Diaspora remittances: An Ethiopian nurse in Los Angeles buys USDC and sends it directly to her mother’s phone in Gondar. Mom swaps the USDC for birr through a local crypto broker at a rate far better than the bank’s – effectively beating both high fees and the bad exchange rate. What used to take days and heavy fees via wire transfer now happens in minutes, with a quick stop at a nearby agent to convert some of the digital cash into paper birr for groceries.
Importers and small businesses: A car parts dealer in Addis needs to pay a supplier in Dubai $5,000. With banks delaying wire transfers for weeks, he finds a peer on a Telegram channel to exchange birr for Tether (USDT). He then sends USDT to the supplier, who instantly converts it to dirhams. The dealer keeps his shop stocked, and both parties saved a mountain of paperwork. Many import-reliant SMEs are doing similarly – stablecoins have become a workaround for the dollar rationing that has plagued businesses.
Savings and inflation hedge: A tech-savvy university student in Addis Ababa uses her stipend to buy a little USDC each month on a peer-to-peer app. With annual inflation still in double digits (even cooling to ~13%, prices are rising much faster than bank interest rates), she chooses to hold some savings in stablecoins pegged to USD. This way, she protects her money’s value – one USDC today will still buy roughly the same tomorrow, whereas one birr… not so much. Over a year, that can be the difference between being able to afford her graduation fees or not. In fact, many young professionals and students in Ethiopia have started keeping a portion of their wealth in digital dollars as a hedge against the birr’s depreciation.
Freelance and digital work: Ethiopia’s growing IT and creative freelancers face difficulty getting paid – services like PayPal aren’t fully available, and bank transfers for $200 of contract work are impractical. Some have turned to crypto. For instance, a freelance graphic designer lands a gig for a client in Europe; she asks to be paid in USDT. She then sells the USDT locally for birr to pay her bills. It’s not just individuals: even NGOs and churches have explored receiving donations via stablecoins when other channels were blocked due to sanctions or bureaucracy.
These use cases mirror what we’ve seen elsewhere in Africa – crypto use driven by necessity, not speculation. As one observer noted, people don’t care about the buzzwords; “they care about what crypto does”. In Ethiopia, what stablecoins do is simple: move money faster, cheaper, and in a form (USD) everyone trusts. They are effectively becoming a digital hawala. Just as the old hawala brokers built trust through personal networks, today’s crypto intermediaries build trust via encrypted chats and word-of-mouth reputation.
Constraints and headwinds
Lest we paint too rosy a picture, let’s acknowledge the constraints and risks that cast shadows over Ethiopia’s stablecoin prospects:
Regulatory uncertainty and risk: Using crypto inside Ethiopia today is technically against the law. This means users operate at their own risk. While enforcement has been lax (there haven’t been high-profile arrests of crypto users), the threat is there. Businesses can’t openly advertise “Pay with USDT” and banks certainly won’t touch anything crypto-related. Until formal regulations are in place, stablecoin usage will remain somewhat clandestine, limiting its reach to those “in the know.”
Connectivity and digital literacy: With only ~19% of the population online, Ethiopia’s digital infrastructure is still developing. Large swathes of the rural populace have no internet access or even reliable electricity. Smartphones are spreading (tens of millions are in use), but many are used just for calls and Facebook. To use stablecoins, people need at least a basic data connection and understanding of wallets/keys. That’s a big ask outside city centers. Moreover, the government has a track record of internet shutdowns during unrest – which could instantly halt crypto transactions in affected areas.
Forex regulations and capital controls: Ethiopia maintains some of the strictest FX controls in Africa. Exporters must surrender a portion of their earnings at the official rate, and citizens are generally not allowed to hold foreign currency without permission. If stablecoins enable people to sidestep these rules, the government might crack down. For example, a farmer who exports coffee and gets paid in USDC could bypass the central bank’s requirement to convert his earnings to birr (similar to how Zimbabwean tobacco farmers used crypto to avoid forced conversion). Authorities will not like that if it becomes widespread – it undermines their ability to manage the currency and gather reserves.
Education and scams: Ethiopia’s recent embrace of digital finance has unfortunately come with a wave of Ponzi schemes and scams (many remember the MMM pyramid scheme that hit Africa, and more recent crypto scams). Without proper education, new users are vulnerable to losing funds by sending to the wrong address or falling for get-rich-quick tokens. The government’s caution is partly to protect a financially naive public. As one official said: we must avoid situations where “people are duped by fake digital currency brokers.” Training and consumer protection will be vital as stablecoin use grows.
Financial institution resistance: Banks in Ethiopia enjoy captive business due to the closed market. They may lobby against open crypto usage, or conversely, push to be the only permitted gateways. Either way, incumbent inertia could slow adoption. There’s also the looming presence of the digital birr (CBDC) – if launched, the central bank might heavily promote it and dissuade use of private stablecoins, preferring a system they fully control.
Despite these headwinds, the momentum for digital currency use is building. The sheer economic logic – saving 7% in fees here, avoiding a 30% currency haircut there – is too powerful to ignore. And if there’s one thing Ethiopians have proven over decades of hardship, it’s that they will “find a way to make a plan” (to borrow a Southern African saying). From the smallest village market to the bustling mercatos of Addis, people adapt when the current system doesn’t meet their needs.
How stablecoins could help Ethiopia
So, how exactly might stablecoins fit into Ethiopia’s financial future? Let’s paint a picture. Imagine a year or two from now: Ethiopia has issued a clear directive allowing licensed crypto platforms to operate under oversight. Perhaps one or two local startups (or East African crypto firms) get approval to integrate with Telebirr and bank systems. Diaspora Ethiopians can officially purchase a regulated stablecoin – say an “eBirr token” backed 1:1 by hard currency reserves – to send home instantly. Small businesses can hold these tokens in their mobile wallets and cash out in birr as needed. Crucially, these tokens move peer-to-peer, so they don’t clog up the limited banking channels.
Here are the tangible benefits Ethiopia could reap:
Cheaper, faster remittances: Over 2 million Ethiopian-origin people live abroad, and they sent home over $4–6 billion last year. By using stablecoins on mobile, a far greater share of that money would reach recipients (instead of disappearing in wire fees). Transfers that took days could arrive in seconds. This means more disposable income for families and more foreign currency effectively entering the local market (since people trade the tokens for birr).
A stable store of value: The birr’s annual inflation, while improving, is still expected around 10% or more. Over the past decade, the birr has lost much of its purchasing power. Stablecoins give ordinary Ethiopians an accessible way to hold savings in dollars (or other strong currencies) without needing a U.S. bank account. It’s like opening a USD savings account via your phone. For those saving up for a big expense – be it a house, a wedding, or emergency medical funds – not watching their money erode is a blessing. In countries like Nigeria and Zimbabwe, citizens already do this with USDT/USDC, and Ethiopians could follow suit.
Global trade and business linkages: Stablecoins could help Ethiopian exporters and importers bypass some of the current banking bottlenecks. An exporter of coffee, for instance, might receive payment in a USD stablecoin from a European buyer. This way, they get full value immediately, rather than waiting and potentially having a chunk converted at a poorer rate. Importers can pay suppliers in Asia similarly. This not only saves on fees but also time – goods arrive faster when payment isn’t stuck in limbo. In fact, some Ethiopian importers already quietly use crypto for this reason, as it “allows value to move while the official system is stuck in first gear,” one businessman confided.
Financial inclusion via mobile: With the majority of Ethiopians now having access to a mobile phone (even if not all are smartphones), stablecoins delivered through simple mobile interfaces could leapfrog traditional banking. Just as M-Pesa brought basic finance to the Kenyan masses, stablecoins could bring cross-border finance and dollar savings to Ethiopian farmers and merchants who never had that option. All they need is a phone and a local agent/cash-out point. As smartphone adoption grows and data becomes cheaper, this effect will multiply – recall GSMA projections that Africa will reach 87% smartphone penetration by 2030. Ethiopia’s youth won’t be left behind.
In short, stablecoins would complement Ethiopia’s birr, not replace it. Think of them as a pressure-release valve: they ease the strain where the current system leaks value (high fees, inflation, delays) while allowing people to transact globally. Every digital dollar that comes in via a stablecoin is one less black-market trade the central bank has to fret over – because, in theory, these could be made visible and regulated.
Of course, the government will want to maintain control – so we might see local birr-pegged stablecoins too. Perhaps private banks will issue their own tokens backed by hard currency deposits (in collaboration with the central bank). Already, South Africa and Namibia are exploring regulated stablecoins for cheaper payments. Ethiopia could leverage those lessons to craft its own approach, ensuring that capital flight and illicit flows are mitigated.
A word of caution
Before we all start dreaming of a stablecoin utopia in Addis Ababa, a reality check: stablecoins are only as good as their reserves and governance. If Ethiopians are to trust a digital token, they need confidence that it’s genuinely redeemable for the dollars it represents. Globally, not all stablecoins are created equal – some have lost their peg or collapsed, hurting users. Any stablecoin solutions in Ethiopia, whether private or official, must be transparent and robust to gain trust.
Moreover, crypto is not a panacea for deeper economic issues. Ethiopia still needs to address its debt burden, spur job creation, and manage inflation through sound policy. Stablecoins won’t magically stabilize the birr or eliminate the need for tough reforms. They are a tool – a very useful one – but not a substitute for macroeconomic discipline. The government is right to be cautious about unfettered crypto use, as a sudden dollarization (even via digital means) could reduce the central bank’s ability to conduct policy. The key is a balanced approach: allow innovation in a way that complements reforms. Use stablecoins to make life easier for citizens and businesses, while continuing to strengthen the overall financial system.
Education will be crucial. As Ethiopia opens up to these technologies, public awareness campaigns should teach people about avoiding scams, protecting their wallet keys, and using only licensed platforms. We have seen in neighboring Kenya and Nigeria that when people are informed, they use crypto more safely and productively – treating it as a financial utility, not a get-rich-quick gambleronga.com.
Conclusion
From the buzzing tech start-ups in Addis to the farmland of Oromia, Ethiopia is a country at the cusp of financial transformation. High remittance fees, a roller-coaster birr, and exclusion from global finance have left many Ethiopians financially parched. Stablecoins offer a refreshing drink – a way to store and send value that isn’t constantly leaking away. They can empower the hustling entrepreneur in Mercato, the diligent nurse in the diaspora, and the hopeful student saving for a better future.
Will the Ethiopian government embrace this innovation? Signs are cautiously optimistic – they’re exploring regulation and even planning a digital birr, showing they know the digital finance train has left the station. The coming years will be a delicate dance between control and freedom, old systems and new tech. But if money can move as quickly and freely as an SMS, Ethiopia’s people stand to gain immensely.
There’s an Ethiopian proverb that says “Kes be kes, inkulal be’iritu yihedal” – “Slowly, slowly, the egg will walk on its foot.” Change comes gradually, but it comes nonetheless. Stablecoins won’t transform Ethiopia’s economy overnight, but step by step, they could help a financially constrained nation walk forward into a more connected and prosperous era. And as Mukoma Mari, your ever-curious guide through Africa’s crypto frontier, I’ll be watching (and cheering) as Ethiopia’s journey unfolds – one digital birr at a time.