There’s a good reason for the banning of bitcoin and digital currency usage in Ecuador back in July.
According to an Associated Press report, Ecuador has plans to create the first government-issued digital currency, in a move that may eventually see the phasing out of the U.S. dollar in use by the country today.
Officials at the country’s Central Bank have said they expect to begin circulating the digital currency some time in December of this year, though details on what said digital currency will be named is under wraps.
A key point officials have made is that the digital currency will not be like bitcoin, and the amount created by the Central Bank simply (or perhaps not so simply) depends on demand.
The currency — at least for now — will exist alongside the dollar, but will be backed by liquid assets, the AP reports.
In a nation where a massive amount of the population cannot afford traditional banking, digital currency could very well help them make and receive payments from their mobile devices.
The official who’s watching over the project, Fausto Valencia, has said the software is already in use by cellular phone companies in Paraguay. So it’s rather clear this will not resemble the digital currencies we are familiar with today.
President Rafael Correa said the only issue he sees with the project is that it’s taken this long to launch.
Digital currency use will be voluntary, and more information will be available in the months ahead. It’s will definitely be interesting to see where this one goes.