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The Almighty Buck Government

Ecuador To Forge Ahead With State-Backed Digital Currency 85

Posted by samzenpus
from the lets-make-money dept.
First time accepted submitter jaeztheangel writes Ecuador's government has approved plans to start a new Digital Currency backed by the state. With defaults in recent history, and dwindling oil reserves it will be interesting to see how this decision turns out. From the article: "Congress last month approved legislation to start a digital currency for use alongside the U.S. dollar, the official tender in Ecuador. Once signed into law, the country will begin using the as-yet-unnamed currency as soon as October. A monetary authority will be established to regulate the money, which will be backed by 'liquid assets.'”
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Ecuador To Forge Ahead With State-Backed Digital Currency

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  • Re:Wow (Score:5, Informative)

    by Ralph Wiggam (22354) on Wednesday August 06, 2014 @06:27PM (#47618357) Homepage

    When a nation's currency basically falls apart, they are forced to turn to another country's currency to get their economy to function.

    In Costa Rica they "peg" their currency to the dollar, so there is one permanent exchange rate. Prices can be posted in Colon and Dollars. I paid for everything with dollars when I was there (fantastic country BTW).

    Wikipedia lists 25 countries that either use USD or peg to the USD (I'm suspicious of Somalia and North Korea). It's interesting that Panama has been using Dollars for over 100 years.
    http://en.wikipedia.org/wiki/Currency_substitution#Anchor_currencies

    From-
    http://en.wikipedia.org/wiki/Currency_of_Ecuador#1932.E2.80.932000_Sucre

    "The sucre maintained a fairly stable exchange rate against the US dollar until 1983, when it was devalued to 42 per dollar and a crawling peg was adopted. Depreciation gained momentum and the free market rate was over 800 per dollar by 1990 and almost 3000 per in 1995.

    The sucre lost 67% of its foreign exchange value during 1999, then in one week nosedived 17%, ending at 25,000/US$1 on January 7, 2000. On January 9, President Jamil Mahuad announced that the US dollar would be adopted as Ecuador's official currency. Protests led to his removal. Vice President Gustavo Noboa became president, only to confirm the government's commitment to dollarization.

    On March 9, 2000, Noboa signed a law passed by Congress, replacing the sucre with the United States dollar at an official exchange rate of 25,000 sucres per US$1. Both currencies were to circulate, the dollar being used for all but the smallest transactions. Only coins would continue in the local currency."

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