QUITO -- Ecuador's Monetary Council has published a resolution making it mandatory for private and public banks to deal with transactions in electronic currency.
Depending on their size, banks will have between 120 and 360 days to register as Macro Agents of the electronic currency system in the central bank.
The resolution reiterated that the central bank is the only entity authorized to issue electronic currency, and that the electronic currency must be backed up by liquid assets of the central bank.
Analysts believe that this resolution only looks to enhance the mechanism for the use of electronic currency. The key concerns of the private sector regarding the use of electronic currency were the potential ability of the government to make payments to suppliers or employees in electronic currency if it faces considerable liquidity constraints.
Finance ministry officials have completely discarded any intentions of doing so.
At present, electronic currency can only be accepted voluntarily by economic agents and that it cannot be backed by government’s securities.
According to central bank data, between October 2014 and 22 May 2015, $570,000 of electronic currency were issued. Meanwhile, central bank reserves stood at $4.8 billion, and the total liquidity of the economy (M2) reached $40 billion, around 40% of GDP.