ASMARA — Eritrea has issued a nationwide directive ordering all citizens and organizations to deposit all Eritrean nakfa banknotes into commercial banks before the end of July, in a sweeping measure aimed at tightening control over cash circulation in the country.
Under the directive, individuals and institutions are required to move all physical cash into formal banking channels, while those without bank accounts must open one immediately to comply with the order. Authorities have warned that failure to comply could result in unspecified legal consequences.
The government says the policy is designed to strengthen financial oversight, curb informal and unregulated cash transactions, and improve the state’s ability to monitor money flows across the economy.
Officials also argue that the move will help modernize Eritrea’s financial system by increasing banking participation and reducing reliance on cash-based transactions, which remain dominant in many sectors of the economy.
The directive effectively centralizes cash holdings within the formal banking sector, giving financial institutions and regulators greater visibility over deposits, withdrawals, and transfers.
Analysts note that such measures can have wide-ranging economic implications, including short-term disruptions as individuals and businesses adjust to stricter banking requirements, particularly in economies where access to banking services is uneven.
Authorities have not yet clarified whether exemptions will apply to remote areas or how enforcement will be carried out, but state institutions are expected to oversee compliance during the transition period leading up to the deadline.
