- Ecuador’s Central Bank reiterates that cryptocurrencies, including Worldcoin’s WLD token, are not legal tender and their use as payment is prohibited.
- The bank warns of potential investigations and sanctions for those using cryptocurrencies as payment methods.
In the midst of the growing popularity of Worldcoin and other cryptocurrencies in Ecuador, the country’s Central Bank (BCE) has reaffirmed its stance on digital assets. In an official statement, the BCE emphasized that cryptocurrencies do not have legal tender status in Ecuador and their use as a payment method is expressly prohibited.
The only currency with legal tender status in Ecuador is the US dollar. Despite thousands of Ecuadorians currently operating with cryptocurrencies, the BCE stressed that virtual assets cannot be used as a means of payment. Anyone violating this prohibition risks investigation and sanctions.
Regulatory Stance and Risks
While Ecuador acknowledges the growth of the cryptocurrency ecosystem, evidenced by adoption studies and the recent popularity of Worldcoin, the BCE is firm in its position that virtual assets cannot be used in Ecuador. The bank warns that investigations and sanctions could be imposed on those who do so.
According to Ecuadorian law, if an individual or legal entity uses crypto-assets as unauthorized payment methods, the BCE will
“inform the Attorney General’s Office for the corresponding investigation and sanction.”
The Central Bank also used its statement to warn citizens that trading cryptocurrencies
“could generate significant losses due to their high volatility.”
This warning comes in the wake of recent market downturns affecting stocks, commodities, and cryptocurrencies.
Worldcoin’s Rise and Regulatory Response
The BCE’s statement comes at a time when Worldcoin, a high-profile and controversial cryptocurrency project, is experiencing a surge in popularity in Ecuador. Thousands of users in Quito and Guayaquil have signed up for Worldcoin by scanning their irises in exchange for a reward of approximately $20 worth of WLD tokens.
However, this practice has raised concerns among some authorities in Ecuador. The Superintendency of Companies, Securities, and Insurance issued a statement warning that Worldcoin is an
“irregular activity.”
Alfredo Velazco, director of the Digital Users organization, noted that Ecuadorians have flocked to Worldcoin booths, with lines exceeding 150 people daily. He also expressed concern that many people scanning their irises and selling them to Worldcoin are doing so out of financial necessity.