NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Monday, June 1, 2015

While companies worldwide are embracing the rise of decentralized cryptocurrency bitcoin, Ecuadorian officials have chosen to make local banks adopt a home-grown state digital currency — whether they like it or not. The nation’s central bank has given them 360 days to get on board, with a mandate in Resolution 064-2015-M, released on May 25 in the official register.

The ruling, signed by Economic Policy Minister Patricio River Yánez, establishes that “all entities of the public, private, and cooperative financial sectors are obliged to incorporate themselves as macroagents within the Electronic Currency System.”

The document stipulates that financial institutions will have to provide an electronic tender option for “all the services that they currently offer and those that they will subsequently offer.” Each bank will thus have to open an account with the government-run Electronic Currency System.

Ecuadorian establishes the US dollar as the official currency, under the purview of the Central Bank of Ecuador (BCE). The digital currency will, therefore, be “equivalent and convertible to US dollars.”

The objective of the electronic system is, according to the resolution, “to seek efficiency in payment systems to promote and contribute to the economic stability of the country.”