Is Ecuador Ready for A Government-Backed Cryptocurrency?

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Ecuadorian Government Bans Bitcoin despite Okaying Electronic Money
Ecuadorian Government Bans Bitcoin despite Okaying Electronic Money

Ecuadorian Government Bans Bitcoin despite Okaying Electronic Money

We heard recently about the Ecuador government’s decision to ban Bitcoin and other forms of cryptocurrencies. However, the little twist in the news was the government’s plan to introduce a centralized form of digital currency under a new Reform Bill. The proposal received a majority of nods, which will further helped it to transform into a full-fledged law.

But does it mean that the future of Bitcoin and other cryptocurrencies are uncertain? Does Ecuador’s decision of banning such services mean death to Bitcoin within a particular territory? The capable answer is a clear ‘No’.

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What Ecuador’s government should first understand is the mindset of a cryptocurrency users. It is obvious that they are not after such technological mode of payments, just because they are digital or fashionable; but it is the idea of a decentralized mode of payment that attracts them, which seems clearly impossible in whatever Ecuador is planning to launch. People are tired of being robbed, whether it is via inflation, confiscation, hidden fees, or a dozen other unethical deductions. People are further trying to avoid the absurd limits set by finance regulators in both developed and developing economies. These limits include capital flow control, restrictions on purchasing foreign currencies, etc.

In frank words, the idea of providing a regulated alternative is plain stupid. It is untrustworthy because of pre-installed centralization. It brings back the same monopoly people have been trying to avoid while praising Bitcoins. No wonder Ecuador cryptocurrency users and businesses will be finding it impossible to break the law, until it turns out to be fashion; a financial revolt may be.

So indeed, the Ecuador government lacks the technical aspects of Bitcoin, and all those cryptocurrencies that at least offer people with anonymity. How possibly they will influence people in using a regulated digital currency is another case; but for now it seems like people will have no faith, recognition and credibility for the upcoming “legal” coin.

To contact the reporter of the story: Yashu Gola at yashu@forexminute.com

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