The Challenges and Opportunities of Adopting Cryptocurrency in Ethiopia.
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Date
2025-06-28
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Addis Ababa University
Abstract
Crypto currencies have emerged as a revolutionary financial innovation, offering both significant challenges and opportunities for economies worldwide. This research explores the adoption of crypto currency in Ethiopia, a country with a burgeoning digital landscape and a rapidly evolving financial sector.This research focuses on the challenges and opportunities associated with the adoption of cryptocurrency in Ethiopia, where digital finance is new to the country's landscape. Very few studies have explored the cryptocurrency ecosystem in Ethiopia and this research is guided by an extended Unified Theory of Acceptance and Use of Technology known as UTUT2. The key variables focused on in our model are performance expectancy, effort expectancy, social influence, facilitating conditions, price value, perceived knowledge, and perceived risk. A mixed-methods approach was employed, with the first half of the data collected as quantitative responses from a structured survey from 201 respondents located in Addis Ababa and then fielding qualitative insights within interviews from professionals working in finance, national and local government and technology related professions.The findings show there is increased awareness of cryptocurrency use (especially with the younger generation; tech savvy) and there are limited adoption behaviours due to several challenges. The main challenges sustaining cryptocurrency adoption are: poor internet infrastructure, inconsistent power supply, limited digital literacy, inefficient cyber security systems and lack of regulatory infrastructure Additionally, the current action where the National Bank of Ethiopia has placed a "ban" on cryptocurrency is an institutional challenge to overcoming adoption behaviours. Challenges aside, there are opportunities in the Ethiopian environment. Awareness about digital economy solutions is increasing, the rate of mobile phone ownership is high, there is a desire amongst youth to explore alternatives to banking and Bitcoin mining, and the potential to innovate with blockchain technology and unnamed digital financial services solutions that could benefit developing economies. Ethiopia could be seen as a country with multiple crypto/digital solutions and potential for adoption and growth.Quantitative analysis confirmed that adoption behaviours were influenced by effort expectancy, performance expectancy, perceived knowledge and perceived risk. Based on the findings and outcomes of the study, recommendations are made for the use of targeted public awareness campaigns, investments in digital infrastructure, increased cybersecurity solutions, and a balanced regulatory framework to govern cryptocurrency use.