Original article by Belén Marty
Ecuador’s Congress, dominated by the ruling socialist PAIS Alliance, is on the verge of approving a new reform, presented by President Rafael Correa as an urgent matter. The law is for the creation of a digital currency and financial-regulation system controlled by the executive. At the same time, it prohibits any digital currency emitted by institutions other than the nation’s central bank.
Debate over the reform began at 9.30 AM local time on Tuesday, after 62 amendments from the Assembly’s Economic Commission. These came after Correa presented the original version on June 25, but none of the changes are structural or overturn the intent.
— Asamblea Nacional (@AsambleaEcuador) July 22, 2014
Minister of Economic Policy Patricio Rivera said that “with this new code we hope the banking industry will collaborate with the people, and not the people for the banking industry, which is what has been happening since the 1990s.”
According to the bill’s Article 99, the Monetary and Financial Regulatory Committee will regulate the digital currency, and the Central Bank will handle its implementation, development, and evolution.
Opposition Representative Ramiro Aguilar, in a show of support across party lines, affirmed during the committee’s Saturday session that “the provision of a digital currency will be backed by its liquid assets” (presumably with cash reserves). “I think this will give the country some calm,” he added.
Innovation, Privacy within a Monopoly?
Cryptocurrency enthusiasts fear the second element of this proposal. In addition to a digital currency to work alongside the US dollar (Ecuador’s official currency since 2000), the central government is set to prohibit the “emission, production, initiation, falsifications, or any other type of [digital currency] simulation, and its circulation through any channel or way of representation,” as stated under Article 96.