The Ecuadorean government has released more details of its plans to create what it calls the world's first digital currency issued by a central bank.
Central bank officials say the electronic money, as yet unnamed, will start circulating in December.
The new money will be used alongside the existing currency in Ecuador, the US dollar.
President Rafael Correa has said the digital currency will help those who cannot afford traditional banking.
Central bank officials say the electronic money will be used to pay government bureaucrats in a "hygienic manner".
The electronic currency is also designed to help poorer Ecuadoreans make and receive payments using mobile phone technology.…BBC News
Ecuador gives details of new digital currency
Gimmick. Ecuador already has a digital currency.
ReplyDelete"the world's first digital currency issued by a central bank"
ReplyDeleteAll national currencies already exist in digital form..
this is basically like giving everyone the opportunity to have a checking account at the central bank, right?
ReplyDeleteFrom the article, one can hope that it is the first step to Ecuador abandoning the peg to the US dollar, so it is more than a gimmick. Also, cheap (central) banking for the unbanked, who often pay outrageous fees, is a real and immediate gain for them.
ReplyDeleteNationalising the transaction system is one way of removing the TBTF powers of the commercial banks. It makes them more like investment banks that have less knock on effects.
ReplyDeleteUltimately the state only cares about the transaction system. That's why it is forced to issue reserves on demand to help clear it.
It makes some sense to nationalise it - perhaps the only rational part of the sovereign money proposal.
A bit out of topic, but the following link shows how the U.S. is a laggard as far as payments systems are concerned:
ReplyDeletehttp://www.businessinsider.com/banks-have-been-feeding-you-peace-of-mind-while-charging-you-for-not-2014-8
Way behind emerging economies such as India or South Africa.
A shame, really.
Leapfrogging.
ReplyDeleteHappen to the US after WWII also, when rebuilt industries abroad made a lot of US fix capital obsolete and uncompetitive, e.g,, gutting the US steel industry.