Ecuador to introduce world’s first 'official' digital currency

The government of Ecuador has revealed plans to create what it claims is the world’s first digital currency to be issued by a central bank.

The government of Ecuador has revealed plans to create what it claims is the world’s first digital currency to be issued by a central bank.President Rafael Correa says that the digital currency is to be released in December and will be used alongside the country’s existing currency, the US dollar. Few details of the scheme have been released but the government have said that the new currency will be backed by liquid assets.President Correa stated that the aim is to make the electronic currency easier for the 48 per cent of Ecuadorians who do not hold bank accounts to make and receive payments using mobile phone technology.Similar, privately run systems have proved to be successful in several African countries, but there are suspicions that in Ecuador, the government has other reasons to adopt the new currency.In 2000 Ecuador suffered a debilitating bank crisis and as a result, adopted the US dollar as its currency, but since then public spending has soared and so have Ecuador’s debts. China is the country’s main creditor – Ecuador owes it $11 billion – almost 15 per cent of the Latin American country’s economy and analysts have speculated that the new electronic currency could be used to boost the supply of money and therefore devalue the dollar – which would lessen the weight of dollar debt.The new currency was approved by Ecuador's National Assembly in July and does not yet have an official name, but it is not to be confused with Bitcoin – the controversial cryptocurrency which is in use in Brazil and Argentina. At the same time that it authorized its own digital currency, Ecuador prohibited the use of Bitcoin by law.  

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