Ecuadorian officials are requiring local banks to adopt the country’s official electronic currency, reported the PanAm Post.
Ecuador’s central bank has given them 360 days to get on board with the electronic currency, according to a mandate released on May 25.
Signed by Economy Policy Minister Patricio River Yánez, the ruling states that “all entities of the public, private, and cooperative financial sectors are obliged to incorporate themselves as macroagents within the Electronic Currency System.”
Under the ruling, banks will have to provide an electronic tender option for “all the services that they currently offer and those that they will subsequently offer,” reported the PanAm Post. Each financial institution will thus have to open an account with the government-run Electronic Currency System.
Under the purview of the Central Bank of Ecuador, the U.S. dollar is the country’s official currency. The electronic currency will, therefore, be “equivalent and convertible to US dollars.”
According to the resolution, the goal of the electronic system is “to seek efficiency in payment systems to promote and contribute to the economic stability of the country.”
The PanAm Post reported that César Robalino, president of the Ecuadorian Association of Private Banks, told the newspaper El Universo that his association has not yet opposed the electronic currency as a “payment method exclusively for transactional ends.”
Robalino said it could be used to reduce the public debt, although the administration of President Rafael Correa has insisted this will not happen. But Robalino cautioned that “you can’t create money out of nothing.”
He also lamented that the government has changed its previous position on making the adoption of the electronic system voluntary for banks.
The PanAm Post reported that the government’s mandate on banks to adopt the electronic system will be implemented in stages, depending on the size of the financial institutions’ assets. Those that hold $1 billion USD and more in assets will have 120 days; those with between $150 million and $1 billion will have 150 days; and those with assets below $150 million will have 360 days to adopt the electronic system.