The Central Bank of Ecuador plans to issue a specific regulation for cryptocurrencies later this year. According to statements by Guillermo Avellan, manager of the Central Bank of Ecuador, this will bring more clarity to the landscape of cryptocurrencies in the country, and will help prevent crimes such as money laundering.

The Central Bank of Ecuador has its eyes on cryptocurrencies

The Central Bank of Ecuador plans to prepare and issue regulations related to cryptocurrencies this year. The announcement was made by Guillermo Avellán, manager of the Central Bank in a interview on January 30. When asked about the state of the country’s crypto regulation and how it appears to lag behind other countries in the region, Avellan stated:

The Central Bank is working on a project to regulate cryptocurrencies, taking into account that the Monetary Code establishes that the dollar is the only legal tender in the country.

Avellán also explained that the new regulation would not make bitcoin or any cryptocurrency legal tender, as happened in El Salvador with the approval of the bitcoin law, due to the volatility associated with these assets. Instead, this piece of regulation would be aimed at bringing more clarity to the status of cryptocurrencies in the country.

Reasons behind resolution

In addition to the factors mentioned above, another reason for issuing the regulation on cryptocurrencies is the concerns that the government has about the possible illegal use of these assets. Avellan stated that with the current regulation, banks will be able to set limits on how these tools are used. There have been cases of actors using cryptocurrencies for money laundering purposes in the country, and these regulations would be aimed at curbing such instances.

While the government issued a bitcoin ban in 2014 and thrown out its own digital token called Electronic Money in 2017, the use of cryptocurrencies in the country has continued to grow. The population is largely unbanked, and 50% of people do not have access to a bank account, according to figures from Avellan.

While he did not give specific dates for the establishment of these regulations, Avellan did offer some estimates. He stated:

We are going to work in the first quarter of 2022 so that it can be reviewed and approved between the second and third quarters of the year by the Monetary Board.

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