Ecuador’s Central Bank Might Regulate Cryptocurrencies In this Year

The Ecuadorian Central Bank intends to issue cryptocurrency-specific regulations later this year. According to Guillermo Avellan, the manager of Ecuador’s Central Bank, this will bring more clarity to the country’s cryptocurrency scene and will help to prevent crimes such as money laundering.

Ecuador’s Central Bank Is Interested in Cryptocurrency

The Ecuadorian Central Bank intends to prepare and issue cryptocurrency-related regulations this year. Guillermo Avellan, the Central Bank’s manager, made the announcement in an interview on January 30th. When asked about the country’s cryptocurrency regulation and how it appears to be lagging behind other countries in the region, Avellan stated: “The Central Bank is working on a project to regulate cryptocurrencies, keeping in mind that the Monetary Code establishes the dollar as the only legal tender in the country.”

Avellan went on to say that, due to the volatility of these assets, the new regulation would not make bitcoin or any cryptocurrency legal tender, as it did in El Salvador with the passage of the bitcoin law. Instead, this piece of legislation would aim to clarify the status of cryptocurrency in the country.

Reasons for the Resolution

Aside from the aforementioned factors, the government’s concerns about the potential illegal use of cryptocurrencies are another reason for issuing the regulation. According to Avellan, with regulation in place, banks will be able to set limits on how these tools are used. There have been instances of actors in the country using cryptocurrencies for money laundering purposes, and these regulations would be aimed at reducing such instances.

While the government banned bitcoin in 2014 and launched its own digital token, Dinero Electronico, in 2017, cryptocurrency usage in the country has grown. According to Avellan’s figures, the population is largely unbanked, with 50% of people lacking access to a bank account.

While Avellan did not provide specific dates for the implementation of these regulations, he did provide some estimates. He stated, “We are going to work in the first quarter of 2022 so that it can be reviewed and approved by the Monetary Board between the second and third quarters of the year.”

 

Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.

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