Ecuador was one of the first countries in the world to launch a state-run digital currency, the "Sistema de Dinero Electrónico" (Electronic Money System), in 2015. The Central Bank of Ecuador oversees the regulation of this system and issues licenses for companies to operate as electronic money issuers.
The Organic Law (7) for the Development, Regulation, and Control of Financial Technology Services, also known as the Fintech Law (the Law), came into effect on December 22, 2022, through its publication in the second supplement of the Official Register No. 215. Its main objective is to provide legal security to financial technology companies operating in the country, promote foreign investment, and provide users with secure access to services that protect their data.
According to the Superintendency (8), the only institutions in Ecuador that are not authorized to make investments in cryptocurrencies in Ecuador are financial entities. The reason is legal since the Monetary and Financial Code prohibits it. But there is also a financial reason to consider and it is the high risk behind these operations.
Ecuador intended to issue regulations on cryptocurrencies in 2022. This was stated by Banco Central del Ecuador (PIB) manager Guillermo Avellán, in an interview with Bloomberg Linea (9). In 2023 Ecuador issued (10) first fintech and blockchain regulations based on Fintech Law. However, new regulations don’t discuss virtual assets or cryptocurrencies. And crypto still doesn’t have clear legislation in Ecuador.
At the same time there is a high demand (11) on cryptocurrencies in the country - about 30% of Ecuador’s population are ready to invest in this sector. This is the highest rate of all Latin American countries. It is not surprising that the Central Bank, in the absence of regulation, issued (12) a warning in August 2024, according to which settlements in cryptocurrencies are prohibited in the country, and the US dollar remains the only legal means of payment. However, residents of the country can invest through foreign exchanges and exchange cryptocurrencies. So the introduction of clearer regulation of cryptocurrency exchange in the country is a matter of time.