🧱 Blockchain: Crypto's Secret Papa

Welcome to the 60th edition of ፍራንክ Digest!

Your weekly brief on all things Finance and Investing. Quick, enjoyable reads for busy professionals in 5 minutes or less.

Here’s what’s coming your way:

• 🪙 Cometh the Crypto ban, Cometh the Blockchain

• 🎥 The Showmanship vs Substance of Ethiopia’s Tech Narrative

• 🗝️ The Key Takeaways

Thanks for reading!

The Blockchain Possibility: Ethiopia’s Quest to Fulfill?

Innovation

Did you know that it is illegal to transact in cryptocurrencies in Ethiopia?

It’s true. 

Ethiopia officially banned the practice at the end of 2024.

Got some Bitcoin?

Stay away from doing cute dances on TikTok boasting about it.

Dabble in Ethereum?

Fancy. But don’t let the financial watchdogs watch you trade it.

The fine? 10,000 ETB. And a possible extended 3 year vacation at one of our nation’s luxurious prison resorts. ፈታ ማለት ከፈለጋቹ 🏖️

Message here: ‘Crypto bad. Punishment severe.’

The NBE usually takes a very cautious approach when it comes to new digital tech. Like any new toy, it’s important to see if it can cause any health related hazard to the financial well-being of the Ethiopian economy.

In crypto’s case, its real life use case hasn’t been universally accepted besides its ability to settle payments. Ex: you use bitcoins, the seller translates them into dollars and you walk away with your goods. 

Side note: As of Sunday June 15th, Google says that 1 lovely Bitcoin is worth 14.25 million ETB!

It's generally viewed as a speculative asset, meaning traders bet on it going up or down to profit from its trajectory. That’s why a lot of traders got rich off of it during the pandemic. 

     Pandemic induced boredom = sudden urge to become a superstar financial guru 👨‍🎤

It’s also an asset that is very volatile and not directly linked to any economic input or output. However, the flip side to the coin is that it can be utilized as a tool to hedge against inflation and currency unpredictability. 

Think of crypto as your aunt Kidist, she might be a bit too much and too loud at family gatherings, missing her steps and telling inappropriate jokes but she’s the only one who will give the most honest life advice in the end. 

Another one of its characteristics is that it is super hard to regulate, and we think that the financial watchdogs may be worried of its potential use outside the walls of the law. 

FYI, crypto mining, aka, the generation of new crypto assets (minting new coins so quite literally, creating money) through means of extensive power consumption is legal in Ethiopia. Actually, it's more than legal, it’s encouraged with $55M earned from such investments in the first 10 months of 2024. 

Mining is another topic but for all of you keen on printing your future ‘Birrcoins’, here’s a beginners guide on how to.

Ethiopia took the stance of China by banning all crypto related trade. The US is still grappling with the idea of crypto possibly not being classified as a financial asset. Elsewhere, its adoption galore with bitcoin ATMs and government tax payments on the blockchain.

Yes, we’ve finally mentioned the keyword. The word that’s in the title.

Thanks guys, it only took ¾ of the way for you to get here but hey, we’re subscribed for a reason!...So, carry on.

Thanks.

Part of the reason why crypto is hard to regulate is because of the technology that powers it: Blockchain. 

(The) Blockchain is a decentralized, immutable digital ledger that stores information on different networks. In Layman’s terms, it’s this giant database that lives on different computers, making it hard to change the records that it contains and forcing owners of the ledger to validate each change individually.

To make our point, let’s separate crypto from blockchain and focus on the latter part. 

Blockchain can be used to solve some of Ethiopia’s biggest hurdles that are plaguing its financial system. 

1. Identity verification (KYC). The new Fayda data can be stored on the blockchain ensuring immutability and uniqueness. No new records are created randomly, nor destroyed. 

How we see this happening:  Loan requests can be sped up as KYC is done within seconds. All the banks and lenders can have access to this blockchain database. 

2. Cross-border payments: say goodbye to Western Union or MoneyGram, international transfers can be simplified with secure and fast fund movements. This cuts out any intermediary 

How we see this happening:  Remittances are a big part of the economy, with diasporas sending USD and Euros, transfers will be as quick as those WhatsApp ‘I miss you’ texts!

3. Asset tokenization: imagine diving up your assets (House, car, investment, personnel collections etc.) into digital assets. This would simplify fractional ownership, reduce settlement times and eliminate paper work. Plus tokenization ensures authenticity and validates ownership.

How we see this happening:  Inheritance and property distribution would be facilitated much easily. 

Blockchain is the quiet motor behind crypto’s engine, yet it’s not appreciated enough for the value it brings.

Sure crypto is one use case, but blockchain can serve other purposes. Its robust data storage mechanisms coupled with its complex security structure makes it a perfect tool for the financial system.

The lack of vigorous systems in developing countries like Ethiopia can potentially be the testing ground for new blockchain applications. Regulation permitting, the benefits outweigh the disadvantages. 

Despite early setbacks with the crypto ban, Ethiopia could soon realize that its digital journey has some ‘immutable’ truth to it. 

Key Takeaways

1. Bad crypto: Early push back on crypto transactions has shown that Ethiopia is still undecided on what digital path it needs to take

2. Focus on Blockchain: Crypto being a subset of blockchain, the technology that powers Bitcoin and meme coins alike has other beneficial applications like Asset Tokenization, KYC and facilitating cross-border payments

3. Ethiopia's journey: The country is trying to maximize on the crypto boom with early investments of power sales for crypto mining. Outside of crypto, Ethiopia can leverage the technology that powers it. An archaic financial system can be a great experimental ground to validate blockchain use cases.

ፍራንክ Picks 

🚶🏽 Event: Big5 Construct Ethiopia 2025 [ Millennium Hall, June 26-28 ]

🗞️ In the news: Ethiopia ready to pull out its cheque book to repay $3.4B debt

♟️ Innovation: Ethiopia’s gig economy gets a new player

Behind The Screens: Ethiopia’s Tech Ecosystem

Innovation

Let’s say you went to a restaurant.

The menu glows with futuristic font, the waiter arrives on a hoverboard, and your food is served on a plate that says "Chefless Creation" or something—only for you to find it’s just injera and shiro.

Great presentation, familiar flavor.

That’s a little how Ethiopia’s tech scene is starting to feel.

From digital transformation roadmaps to drone-filled skies, the country is projecting a big, bold tech vision to the world. And hey, there’s a lot to admire—biometric IDs, digital wallets, AI institutes, startup laws.

But like any ambitious performance, you can’t help but wonder: behind all the smoke and mirrors, how much of this is actually working? After all, building a tech ecosystem isn’t about going viral—it’s about being viable.

Let’s break down the difference between what dazzles and what delivers.