The National Bank of Ethiopia (NBE) prepared several pieces of legislation, including the establishment of a legal framework for introducing a central bank digital currency (CBDC).
The National Bank of Ethiopia (NBE) prepared two pieces of legislation as part of its economic reform plan. One includes establishing a legal framework for implementing a central bank digital currency (CBDC), while the other includes economic liberalization and consumer protection.
The NBE bills include creating a regulatory sandbox for innovative financial solutions, including CBDCs, and cover some banking issues. In particular, the NBE plans to open the banking sector to foreign investment. Meanwhile, several prompt corrective actions will be introduced to “problem” banks, including the NBE’s involvement in settling failed banks’ liabilities and changes in the composition of commercial banks’ boards of directors.
Ethiopia’s Council of Ministers approved the bills. They’ll soon be introduced into the House of Representatives, whose members can make comments and final ratification. The bills are part of the government’s Homegrown Economic Reform Agenda.
Crypto adoption is gaining momentum in several African countries. The Central African Republic adopted Bitcoin as an official means of payment and launched the state cryptocurrency Sango. Nigeria is actively developing the CBDC (eNaira) pilot project launched in 2021. Moreover, the country authorized the use of digital currencies as a tool for investments. Zimbabwean authorities use ZiG, a gold-backed digital currency that received a physical equivalent in the form of banknotes, as an official means of payment.
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