Ecuador and Cryptocurrency

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The Central Bank of Ecuador has stated that Bitcoin is not an authorized payment method in Ecuador.^[1] It further clarified that bitcoin, as a cryptocurrency, is not backed by any authority, because its value is based merely on speculation.^[2]

The Central Bank also stated, however, that the purchase and sale of cryptocurrencies such as bitcoin through the internet are not forbidden,^[3] but it reiterated that bitcoin is not legal tender and is not an authorized payment method for goods and services according to article 94 of the Código Orgánico Monetario y Financiero (Organic Monetary and Financial Code).^[4]

Most recently, presidential candidate Andrade Giovanny has expressed an interest in establishing a cryptocurrency concurrent with Ecuador’s US dollar standardized economy.^[5]

While the proposal remains controversial due to the Ecuadorian adoption of the US dollar in 1999, interest and support for cryptocurrencies have been gaining traction in the country’s banking sector since as early as 2018.^[6]

P.S. Insights on Cryptocurrency Legal Issues

Most jurisdictions and authorities have yet to enact laws governing cryptocurrencies, meaning that, for most countries, the legality of crypto mining remains unclear.

Under the Financial Crimes Enforcement Network (FinCEN), crypto miners are considered money transmitters, so they may be subject to the laws that govern that activity. In Israel, for instance, crypto mining is treated as a business and is subject to corporate income tax. In India and elsewhere, regulatory uncertainty persists, although Canada and the United States are relatively friendly to crypto mining.

However, apart from jurisdictions that have specifically banned cryptocurrency-related activities, very few countries prohibit crypto mining.

Our Freeman Law Cryptocurrency Law Resource page provides a summary of the legal status of cryptocurrency for each country across the globe with statutory or regulatory provisions governing cryptocurrency. The globe below provides links to country-by-country summaries:

Other Cryptocurrency and Blockchain Technical Resources:

Podcast:
The Freeman Law Project – Cryptocurrency Regulation and Taxation: A Brief Primer

Is cryptocurrency legal in Ecuador?

Do you have questions about cryptocurrency, digital currencies, or blockchain technology?
Freeman Law can help with digital currencies, tax planning, and tax compliance. Contact us now to schedule a consultation, or call (214) 984-3410 to discuss your cryptocurrency and blockchain technology concerns.

^[1] Comunicado Oficial a la Ciudadanía, Banco Central del Ecuador (Jan. 8, 2018).

^[2] Id.

^[3] RECORDATORIO IMPORTANTE, Banco Central del Ecuador (Feb 14, 2018).

^[4] Código Monetario y Financiero [Monetary and Finance Code] art. 94, Registro Oficial [R.O.], Sept. 12, 2014, document archived at Perma.cc.

^[5] Para hacer uso de este contenido cite la fuente y haga un enlace a la nota original en Primicias.ec:, Primicias (January 14, 2021), Primicias, Entrevista con Geovanny Andrade, candidato presidencial de Unión Ecuatoriana, YouTube.