Ecuador bans Bitcoin and plans own central bank digital currency

Ecuador’s National Assembly voted in favor of a new monetary and financial code that prohibited the use of Bitcoin. The bill, which received 91 votes in favor, was then awaiting the signature of President Rafael Correa to become law.
 

The legislation aimed to establish the Banco Central de Ecuador as the sole legal issuer of electronic money, thereby creating a national digital currency that would be pegged to the US dollar at an unspecified rate. This state-run digital currency was envisioned to replace the decentralized alternatives, effectively making them illegal as forms of payment.
 

The preamble of the draft, penned by President Correa, outlined the government’s vision of transitioning from a bourgeois class status to a popular classless state. The new code was intended to ensure that the rules governing the nation’s financial system would be set by the people’s power rather than by private financial groups or foreign powers.
 

The Bitcoin community in Ecuador, represented by the group BitcoinEcuador, responded by drafting an open letter to the assembly. They argued that while the creation of an electronic currency could bring benefits such as reduced costs and convenience, the technical implementation needed to respect user privacy. The group urged the assembly to exclude the prohibition of bitcoin and to clarify that the central bank’s regulatory powers should only extend to its own national digital currency.
 

Despite these appeals, the bill’s passage marked a turning point for Ecuador, as it became one of the first nations to ban Bitcoin.