Despite Government Ban, Adoption of Bitcoin in Ecuador Continues to Grow
Before issuing their own digital currency, Ecuador banned all others including bitcoin back in July 2014. However, today bitcoin’s use continues to grow in the country.
As part of a reform of the country’s monetary and financial laws, Ecuador banned bitcoin and other digital coins in July 2014. The then-President Rafael Correa, who served from 2007 to 2017, introduced the bill that made bitcoin illegal and signed it into law.
This law requires Bitcoin’s businesses to “shut down their operations immediately. Those who defy the ban will face prosecution, and all bitcoins circulated and assets in bitcoin trades face confiscation,” Panam Post reported at the time.
Part of the aforementioned law provides for the creation of an Ecuadorian digital currency issued by the State backed by the assets of the Central Bank of Ecuador (ECB).
Shortly after banning bitcoin, the government rolled out its own digital currency, called Dinero Electrónico. It is pegged one-to-one to the US dollar, which is the country’s official currency.
However, Ecuador’s private banks did not have confidence in the central bank’s electronic money system.
“We cannot at this point support any financial program that is administered by the BCE since we have no confidence that it is secure,” said Julio José Prado, President of the Association of Private Banks (ABPE).
Currently the Ecuadorian lawyer Alexandra Veloz is the legal adviser to the Report. Referring to the state’s digital currency program, she said last week that “the new system has received a lot of criticism and the adoption of banks and customers has been limited at best.”
Although the government made illegal bitcoin, its use did not stop in Ecuador, Veloz shared. There are buyers and sellers in the country that are listed on Localbitcoins.com and bitcoin can also be purchased through Paypal as other online shopping, detailed attorney. At the time of printing, the cost of a bitcoin in Quito in the Localbitcoins market carries at least a premium of $200. Alexandra Veloz, counsel counsel for this report added:
“A small number of businesses have also taken the risk of establishing bitcoin as an alternative for payment. The national taxation and invoicing system do not integrate these transactions, but they remain an available option.“
The Ecuadorian community Bitcoin even gathered to celebrate Bitcoin Pizza Day on May 22.
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