Don’t count Ecuador out of the cryptocurrency game just yet.
Amidst the recent news that Ecuador would be banning the use of all digital currencies, they announced they would be creating thir own, state-sponsored digital currency.
The idea of a regional-specific coin, though, is nothing new. Auroracoin, Quebecoin, Isracoin, Maplecoin and several other coins have popped up, but the major difference between these and Ecuador’s coin is that none of these coins were state-sanctioned. Rather, they came about as a result of opportunistic coindevs who wanted an easy way to promote their coin. For ome reason or another, many of these coins, but by no means all of them, faded into obscurity fairly quickly.
But Ecuador’s coin is a different story. With a more continuous and reliable source of support in the form of government development, their currency will likely end up taking off at least in Ecuador, especially where all other forms of digital currency are banned.
A Dangerous Precedent
But is this what we want?
Part of the appeal of cryptocurrency is their decentralized nature. No one is able to artificially inflate the money supply, nor can anyone reverse transactions, repossess money, or track your purchases.
While digital currency offers other functional advantages over traditional currency, it’s the privacy, decentralization, and security which gives it the largest appeal. Will Ecuador’s currency include those features as well?
That remains to be seen, but it’s hard to imagine a state-controlled currency surrendering its power over the monetary supply. And rather than simply allowing businesses to naturally come around to the idea of accepting Ecuador’s digital currency because they believe in it, it will likely be forced upon them.
And coercion and blind trust seem to go against everything cryptocurrency stands for in the first place.
Ecuador's New Digital Currency: Dangerous Or Desired?
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