The National Bank of Ethiopia (NBE) has started reviewing possible frameworks for a Central Bank Digital Currency (CBDC) as part of its broader consideration of future digital payment systems.

The assessment aligns with similar reviews underway in many countries, though the NBE notes that cash will remain widely used in Ethiopia for the foreseeable future.

Governor Eyob Tekalign said the Bank is examining potential models for a digital birr and studying how such a system might interact with existing monetary and payment structures. He emphasized that the work is exploratory and intended to help the NBE understand global developments in digital currencies, including stablecoins.

CBDCs are digital forms of a national currency issued and regulated by a central bank. Ethiopia’s draft National Digital Payments Strategy and the updated central bank proclamation provide a basis for studying whether a digital birr would be appropriate within the Digital Ethiopia 2025 framework.

Despite a rise in digital transactions, the NBE expects cash to continue playing a central role due to the size of the rural and informal economy. Analysts note that while digital currencies may support financial inclusion and transparency, they also require careful consideration of privacy, cybersecurity and regulatory preparedness. The NBE’s study aims to assess these issues before determining any next steps.

Source: Capital Ethiopia Newspaper