THE NEED TO INTRODUCE VIRTUAL CURRENCYIN ETHIOPIA: DRAWING LESSONS FROM SOME JURISDICTIONS

Abstract

Though physical cash is still widely circulating, Virtual currencies are under more scrutiny than ever as those governments, global corporations, and banks that make decisions begin to take them seriously as a solution for the future. The role of financial intermediaries such as banks in guaranteeing the value of the currency is not needed in cryptocurrency transactions. Due to convenience to account Cryptocurrencies & transact it or otherwise, the popularity of Cryptocurrency is rising day to day in Ethiopia. Ethiopian government, however, warn against the use of Virtual currencies. Because of Virtual Currencies anonymous nature the ban will not be achieved. In addition banning is the cutting of innovation. Virtual Currencies has a number of advantages with their own risks too. The natures and the scope of applications of Virtual Currencies raise important legal compliance issues.To these issues traditional fait money regulations are not always compatible to Virtual currencies. This research tries to address the need of introducing Virtual Currencies, by showing prospects and challenges of introducing Virtual Currencies, in Ethiopia. To address the issue the study has employed doctrinal research to pin point and analyze risks and opportunities of introducing Virtual Currencies and to address the Laws in Ethiopia in ways of introducing Virtual currencies, by analyzing lessons of some jurisdictions. Though it has few risks, introducing Virtual currency is beneficial to the country in collecting tax, protecting the rights of the public, promoting innovation and to adopt central bank digital currency. Therefore, the government should modify or enact new laws and policies in the country to address the growth and effects of using Virtual Currencies, andto introducing Virtual Currencies in Ethiopia.