Ecuador: what does a country gain and what risks when it assumes a virtual currency?

Ecuador: what does a country gain and what risks when it assumes a virtual currency?



The currency will allow you to make payments with a mobile phone.

Ecuador: what does a country gain and what risks when it assumes a virtual currency?

Without providing too many technical details of what it is trying to do specifically, the Ecuadorian government plans to put into circulation what it calls the first digital currency issued by a central bank. A bet with many advantages but which can go very badly if it does not work.

The intention of Rafael Correa’s executive is for the new virtual currency to start circulating in December and always in parallel with the dollar, which is currently the only official currency in Ecuador.

According to the president, the new currency will be used above all to help those who cannot afford to access traditional banking to take advantage of certain financial services: initially, they will be able to make and receive payments with mobile phones. .

For the moment, not much is known – not even its name – beyond that its use will be voluntary, will be backed by liquidity and cannot be used to compensate employees or contractors of the State.

And it will be state-controlled, so it won’t be a «cryptocurrency» like the Bitcoin, which was in fact banned in the country by the same rule that approved the creation of the new «electronic money».

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