Ecuador Looks to Regulate Digital Currencies by Q3 This Year

Ecuador, the South American nation is set to regulate digital currencies by the third quarter of this year. The plan was unveiled by Guillermo Avellan, the manager of the Central Bank of Ecuador in an exclusive interview with Bloomberg Line.

Guillermo reaffirmed that the United States Dollar is the sovereign monetary currency in the country, noting, however, that the regulation of digital assets cannot be shoved aside seeing the development and the adoption of the nascent asset class amongst neighboring nations in the region.

Guillermo was very assertive with the timeline for the proposed regulation, and on the part of the Central Bank, the guidance would have been ready by the end of the first quarter this year. After the apex bank is done with its role, it will forward the proposal to the Monetary Board who is billed to conduct its review within the second and third quarters of this year respectively. 

As a point of note, the Central Bank boss said that the country is ready to regulate cryptocurrencies does not imply that it will legalize the coins as legal tender. While Guillermo recognized digital tokens as an investment asset, he believes their extreme volatility gives them away as a possible candidate for legal tender.

El Salvador’s Approach to Digital Currencies Not Enough Model to Ecuador

Within the Latin American world, El Salvador remains one of the most forward-thinking when it comes to Bitcoin and the adoption of digital currencies as a whole. Despite the obvious similarities in Ecuador and El Salvador as Dollar-dominated countries, the former’s adoption and ambitions to build a Bitcoin city are not enough to model for the latter to follow.

El Salvador has received criticisms for its Bitcoin adoption from industry leaders and more than one global body including the International Monetary Fund (IMF), and the World Bank. However, it has found the support from regional monetary watchdogs particularly the Central American Bank for Economic Integration (CABEI) was enough for it to proceed with its Bitcoin-as-a-Legal tender move last year September.

For Ecuador, the regulation of digital currencies will be targeted at reducing abuse of the nascent asset class through money laundering, and provide benefits to all citizens by offering detailed clarifications on the usage of cryptocurrencies in the country. This move seems enough for Ecuador at this time.