The Ecuadorian government has announced a ban on “electronic money”, including Bitcoin.
Instead, they’re planning on releasing their own state-sponsored digital currency.
Their new laws, which are currently going to president Rafael Correa for final signature, gives permission to pay for goods using “electronic money”, but bans decentralized currencies like Bitcoin.
The First Government-Backed Digital Currency?
Ecuador’s proposed digital currency will be managed by Ecuador’s central bank, the Banco Central del Ecuador, and will be backed by its assets. It will also run alongside Ecuador’s national currency, the US dollar.
What About Ecuador’s Bitcoin Community?
This is obviously bad news for anyone in Ecuador who is involved in Bitcoin or cryptocurrency.
Any business operating in Ecuador will have to either close up or move to a more tolerant jursdiction. Businesses that operate outside of Ecuador but offer service in Ecuador will face issues as well.
And anyone who violates this ban may have their bitcoins confiscated, face prosecution, or both.
A Growing Trend of Hostility in South America?
Ecuador isn’t the first nation in South America to ban Bitcoin.
Bolivia made a similar move last month by banning any currency not issued by a state, which includes cryptocurrency.
The biggest issue for these states, though, is how they plan on banning cryptocurrency.After all, no mechanism exists by which states can halt the free flow of information online without removing the internet altogether. And if Ecuadorian citizens take the proper precautions, like using a VPN service, Tor, and a private browser, it will be difficult for the Ecuadorian governemnt to discover who’s actually using Bitcoin.
Is there a glimmer of hope here? Could a state-sponsored digital currency be an interesting new development in the cryptocurrency world? Share your thoughts with us below!
Ecuadorian Government Bans Cryptocurrency
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