Clarification on Crypto Legality

The General Manager of the Ecuadoran Central Bank, Guillermo Avellán, has made it clear that cryptocurrency is not illegal in Ecuador. His comments come in response to growing concerns following an official statement from the Central Bank of Ecuador (BCE) that warned citizens about the inherent volatility of cryptocurrency. This official statement led to widespread speculation that the bank might be considering a crypto-trading ban.

Avellán took to X to dispel these fears, stating, "Crypto is not prohibited in Ecuador." He further clarified, "At no time has the ECB banned investment in crypto assets, as this is not within our powers to do so."

His remarks aimed to reassure the public that the central bank does not have the authority to ban cryptocurrency investments. Instead, the bank's primary role is to ensure that the country's only authorized means of payment remains the United States dollar.

Need for Regulation

While Avellán assured that crypto is not illegal, he also emphasized the necessity of regulation. He asserted that Ecuador needs a law to regulate investment in cryptoassets.

According to Avellán, such legislation would help protect investors, promote innovation, and strengthen dollarization in the country. He warned that commercializing assets outside a legal framework could introduce significant risks.

Some international organizations have previously criticized Ecuador for its lack of comprehensive crypto regulation. The issue has gained more attention since the opening of Worldcoin offices in the country earlier this year. This event has led to increased scrutiny and calls for regulatory oversight.

WLD Interest High in Ecuador

Media reports indicate that thousands of Ecuadorians have flocked to Worldcoin scanning centers. The surge in interest has prompted responses from various regulatory bodies, including the Superintendency of Companies, Securities, and Insurance.

On August 6, the Superintendency expressed concern about reports of irregular activity involving Worldcoin. They noted that Worldcoin is not regulated by the Ecuadoran state and advised citizens against handing over their biometric data.

WLD's popularity has surged across Latin America this year, leading to regulatory pushback in several countries. In response, the Worldcoin operator has begun altering its data collection practices in nations like Chile to comply with local regulations.

The Road Ahead

Ecuador finds itself at a crossroads. While the Central Bank reassures that crypto is not illegal, the call for regulation grows louder. The increased interest in Worldcoin and the resulting regulatory concerns highlight the urgent need for a legal framework.

As Ecuador navigates this complex landscape, the balance between innovation and investor protection will be crucial.