Is Crypto Legal in Yemen?

Cryptocurrency exists in an ambiguous legal state in Yemen due to the ongoing civil conflict and the bifurcation of the country's central banking system between the internationally recognized government in Aden and Houthi-controlled authorities in Sana'a (2). The Central Bank of Yemen in Aden, controlled by the U.N.-recognized government, has not issued specific cryptocurrency regulations or recognized digital assets as legal tender (1). Yemen's fractured monetary system and divided governance have created regulatory uncertainty, leaving individuals engaging with cryptocurrencies in a legal gray area (1).

The country faces severe infrastructure challenges that limit cryptocurrency adoption, with less than 10% of Yemenis possessing bank accounts and frequent power and internet outages (2). In January 2020, damage to an underwater cable shut down 80% of Yemen's internet capacity, highlighting the fragility of digital infrastructure (2). The Houthi-controlled Central Bank in Sana'a has experimented with a digital currency called the e-rial since 2018, though this initiative reflects political maneuvering rather than legitimate monetary policy (2).

"The Central Bank of Yemen firmly rejects this reckless and destructive act perpetrated by an illegitimate entity, affirming that this irresponsible behavior constitutes a continuation of the economic war waged by criminal militias against the Yemeni people."

Yemeni citizens are increasingly turning to decentralized finance protocols as traditional banking services remain difficult to access or inoperable due to ongoing conflict and U.S. sanctions targeting Houthi financial infrastructure (1). DeFi platforms account for over 63% of Yemen's crypto-related web traffic, while global centralized exchanges account for only 18%, demonstrating that cryptocurrency use is driven primarily by necessity rather than speculation (1). The Central Bank in Aden has warned against dealing in any digital currency issued by Houthi-controlled entities, describing such currencies as counterfeit and subjecting users to potential international sanctions for engaging with a designated Foreign Terrorist Organization (2).

Source:
https://cointelegraph.com/news/local-yemenis-turning-defi-in-force-amid-us-sanctions
https://english.cby-ye.com/news/188

Last updated: 19-10-2025 Disclaimer: This article does not provide legal advice. If you need legal advice, please contact an attorney directly.