Ethiopia: trading was declared illegal in 2022, yet it is one of the fastest-growing markets for USDT remittances on earth
Ethiopia is the kind of market that proves the central argument of this entire series. The authorities declared digital-asset trading illegal in 2022. And yet today Ethiopia is one of the fastest-growing markets in the world for retail-sized stablecoin transfers, with diaspora families routinely sending value home as USDT. When a behaviour grows that fast in the teeth of a ban, the ban is not the story. The demand is.
Let me set out why Ethiopia matters for anyone thinking about cross-border settlement, liquidity, and stablecoins in frontier markets.
Orientation
Ethiopia is the second most populous country in Africa, with over 120 million people and a large, economically active diaspora. For most of its modern history it has run a tightly controlled financial system with chronic shortages of foreign currency. That combination — a vast population, real cross-border flows, and a scarcity of dollars — is the precondition for exactly the kind of demand stablecoins are now meeting.
The currency shock
In July 2024, under an IMF-backed programme worth around $3.4 billion, Ethiopia floated its currency, the birr. The effect was immediate and brutal. The birr fell from roughly 57 to the US dollar to over 110 within ten days, and continued sliding past 150 by late 2025. On the parallel, or black, market the rate has at times approached 170 to 180 birr per dollar — a gap of more than 40 percent against the official rate.
For an Ethiopian holding savings, that is wealth evaporating. For a business importing goods, it is the dollars they need becoming scarcer and more expensive by the month. When a currency moves like that, people reach for a stable store of value. Increasingly, that store of value is a dollar-pegged stablecoin.
The ban, and the reality underneath it
In June 2022 the National Bank of Ethiopia declared cryptocurrency trading illegal and warned of legal measures. On paper, the door is closed.
In practice, stablecoins have become a financial lifeline. Platforms such as Yellow Card and a growing set of local fintechs allow diaspora Ethiopians to buy USDT abroad and transfer it to recipients at home, who then cash out into birr. The flow is fast, cheap, and works around a banking system that cannot reliably supply foreign currency. Ethiopia has become, by some measures, one of the fastest-growing markets anywhere for these retail-sized USDT transfers.
There is also a second, unusual thread: Bitcoin mining. Ethiopia's cheap hydroelectric power — around three to five US cents per kilowatt-hour — attracted licensed miners from 2022 onward, generating tens of millions of dollars in licensing revenue. The state has since paused new mining permits as the grid hit its limit, but the episode signals a government that is, in practice, more pragmatic about this technology than its trading ban suggests.
The direction of travel
This is the pattern we have now seen across the series. A market bans or restricts, demand routes around it through USDT and peer-to-peer channels, and the authorities are eventually forced to choose between pretending the flows do not exist and building a framework to govern them. Analysts widely expect Ethiopia to move toward a formal regulatory framework, following the path of Nigeria, Pakistan, and others. The economic logic is overwhelming: a country starved of dollars cannot indefinitely ignore a technology that delivers them, cheaply and instantly, to millions of its citizens.
What it means for treasury infrastructure
For now, Ethiopia is an early, largely retail, largely informal stablecoin market. But the building blocks of a serious cross-border settlement opportunity are all present: a huge population, severe dollar scarcity, a depreciating currency, a large diaspora, and demonstrated, fast-growing demand for USDT as a settlement and savings instrument.
As Ethiopia formalises — and the IMF reform programme makes some form of liberalisation likely — the question becomes the familiar one. Will this value continue moving through informal peer-to-peer trades, with all their risk and opacity, or through regulated infrastructure that gives businesses and institutions the same speed and liquidity with compliance, audit trails, and governance? That regulated orchestration layer is what a serious treasury-infrastructure business provides, and Ethiopia is assembling the demand for it in real time.
My read
Ethiopia is not a market to enter today. It is a market to understand early. The currency reform is recent and inflation is creeping back; the legal framework for stablecoins does not yet exist; and the flows are still mostly small and retail. None of that is investable on its own.
But the trajectory is unmistakable. A ban has not stopped USDT from becoming a lifeline — it has simply kept that lifeline informal. The countries that have travelled furthest down this road, Nigeria and Pakistan among them, all looked like Ethiopia a few years ago. The lesson is to watch markets like this before they are obvious, because by the time the framework arrives, the demand will already be enormous.