NBE Orders Full Shift to Digital Securities

The National Bank of Ethiopia (NBE) has announced a full transition to electronic government and NBE securities with the issuance of Directive No. MFAD/001/2025, marking a major step in modernizing the country’s financial markets.

The directive designates the Central Securities Depository (CSD) as the sole official registry for all government securities. Electronic records will now serve as the definitive proof of ownership, replacing paper-based certificates in a shift aimed at improving market efficiency, transparency, and reducing risks.

All existing holders of government securities are required to submit their physical certificates to authorized CSD members — including commercial banks and licensed brokers — for conversion into electronic form. Failure to comply by the specified deadline could result in penalties of up to 5% of the bond’s face value.

Each security will be assigned a unique International Securities Identification Number (ISIN) to streamline clearing processes and facilitate global recognition.

The directive also outlines procedures for handling pledged securities, which will be electronically marked to protect the rights of borrowers and lenders. Securities not tendered within five years will be transferred to a special account administered by the Ministry of Finance.

According to the NBE, this reform is part of Ethiopia’s broader financial sector modernization agenda and is aligned with international standards. It is grounded in the legal framework of the National Bank of Ethiopia Proclamation No. 1359/2025 and the Capital Market Proclamation No. 1248/2021.

CSD member institutions are responsible for facilitating the transition, including document verification, electronic conversion, and record-keeping. The NBE has committed to closely monitoring the rollout and providing regular updates through official channels.