Bitcoin for Ecuador?

As many of you are aware, Ecuador is having troubling Economic problems and it's unique relationship with the American dollar is not helping. There are interesting changes to underway to solve this problem. This article is from Max Keiser's Financial Wars Reports: http://www.maxkeiser.com/2015/12/reinve … o-ecuador/

Ecuadors Dinero Electronico: A National Digital Currency

So far, these banking overhauls are just proposals; but in Ecuador, radical transformation of the banking system is under way.

Ever since 2000, when Ecuador agreed to use the US dollar as its official legal tender, it has had to ship boatloads of paper dollars into the country just to conduct trade. In order to seek efficiency in payment systems [and] to promote and contribute to the economic stability of the country, the government of President Rafael Correa has therefore established the worlds first national digitally-issued currency.

Unlike Bitcoin and similar private crypto-currencies (which have been outlawed in the country), Ecuadors dinero electronico is operated and backed by the government. The Ecuadorian digital currency is less like Bitcoin than like M-Pesa, a private mobile phone-based money transfer service started by Vodafone, which has generated a mobile money revolution in Kenya.

Western central banks issue digital currency for the use of commercial banks in their reserve accounts, but it is not available to the public. In Ecuador, any qualifying person can have an account at the central bank; and opening one is as easy as walking into a participating financial institution and exchanging paper money for electronic money stored on their smartphones.

Ecuadors banks and other financial institutions were ordered in May 2015 to adopt the digital payment system within the next year, making them macro-agents of the Electric Currency System.

According to a National Assembly statement:

Electronic money will stimulate the economy; it will be possible to attract more Ecuadorian citizens, especially those who do not have checking or savings accounts and credit cards alone. The electronic currency will be backed by the assets of the Central Bank of Ecuador.

That means there is no fear of the bank going bankrupt or of bank runs or bail-ins. Nor can the digital currency be devalued by speculative short selling. The government has declared that these are digital US dollars trading at 1 to 1  take it or leave it  and the people are taking it. According to an October 2015 article titled Ecuadors Digital Currency Is Winning Hearts!, the currency is actually taking the country by storm; and other countries in Latin America and Africa are not far behind.

The president of the Ecuadorian Association of Private Banks observes that the digital currency could be used to finance the public debt. However, the government has insisted that this will not be done. According to an economist at Ecuadors central bank:

"We did it from the government because we wanted it to be a democratic product. In any other countries, [digital currency] is provided by private companies, and it is expensive. There are barriers to entry, like [expensive fees] if you transfer money from one cellphone operator to another. What we have here is something everyone can use regardless of the operator they are using."