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Ecuador shifting to an E-Cash Society

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OceanHideaway
  5/22/2014 19:16 EST

The chairman of the Central Bank said the country will implement an electronic money system in the last quarter of this year. You will be able to make payments in dollars through a cell phone.

No need for the internet or an account with a financial institution.

This program will be nationwide and assets will be guaranteed by the Central Bank. The chairman said you would be able to pay your utility bills this way, and even change your e-money for cash, free of charge.

for more read:
http://www.telegrafo.com.ec/economia/item/bce-implementara-dinero-electronico.html

rodreego
  5/23/2014 11:21 EST

I just don't see a sophisticated system like this being enacted, let alone honored in the time span they say.

I didn't get what would be done with all the cash; seized?

Oh, maybe I'll just sit back, relax and wait for the inevitable reversal!

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OceanHideaway
  5/23/2014 14:57 EST

There will always be cash .... has to be....

but it is a move forward from paying bills at designated pay locations

And it gets more funds through the national Bank and out of the private banks faster.

The National Bank takes its share of the utility payments first then ...since it either runs tthem principally or gets paid a portion ...it will have access to itsfunds morerapidly then waiting for payments to pass through a privatee funding system. Actually makes some sense from a national economic point of view.

nickspm
  5/24/2014 10:17 EST

It also makes it easier to integrate other currencies into the economy quickly, if there should be any major dollar devaluation/revaluation issues in the future.

nickspm
  5/24/2014 13:01 EST

This will help protect Ecuador as the dollar increasingly loses its reserve status.

SawMan
  5/26/2014 11:03 EST

The system is still USD-based so it has no effect on purchasing power, so-called "reserve" status or currency rates.

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nickspm
  5/27/2014 02:00 EST

Ecuador and China are very close business partners now, and China knows that the dollar will continue to be devalued to a fraction of its current value.

The Chinese are trying to get rid of their dollars by buying US property---and also by buying what's left of America's small physical gold supply.

The Chinese yuan (currency) will be a better investment for other countries because the Chinese are currently buying enough physical gold to back their currency. The dollar isn't backed by anything. Also FATCA will push people to invest in countries like Russia, which is not FATCA-compliant.
Therefore money in a Russian bank is not under the all-seeing watchful eye of the IRS.

It only makes sense that a country with a lot of oil and natural wealth---like Ecuador---would want to put its wealth into a currency that would retain its value and probably grow---rather than stay all-in the USD currency, which is losing value and pays close to zero percent interest rate.

An e-cash system can allow payment in various currencies without having to go out and collect all the paper money and coins by hand to replace it with something else.

OceanHideaway
  5/27/2014 19:23 EST

It createstwo forms of currency...


the USDollar

and ane'currency controleedby the Ecuador National banking system ...think of it as an e-Sucre...

And my guess is it could become a common currency throughout South America...sort of the Euro-Dollar ...or e-Buck of theLatin American world.

Wouldcertianly put an entirely new spin on the oldeconomicmodeland undercut every large international corporation that trades with SA.

And isnt´that one of the principle goals "21st Century Socialism"?

nickspm
  5/28/2014 14:09 EST

Susan,

When you put it like that, it sounds pretty good!

OceanHideaway
  5/28/2014 18:00 EST

Actually study economics and international banking and history, and don´t fall for the easy lure of consiracy theories.

dumluk
  5/29/2014 00:06 EST

Actually, study enconomics and history and dont fall for the eazy lure of mainstream dupe news.......thankyou very much!

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tomlynch
  5/29/2014 19:58 EST

This is a very dangerous move, towards a cashless society. Any country with a privately-owned central bank has already given up control over their main currency's purchasing power. To then give up physical possession of the same currency is very stupid. The central bank claims that they want to include marginalized sectors/industries... How benevolent of them... In return for their genuine concern and efforts, they'll be able to instantly tax each transaction in this wonderful new system. No more money changing hands with the maid without the bankers getting a piece of the action. And now, a single keyboard stroke can change your account balance to zero. What happens in the even of a communications systems failure? Will people just resort to transacting with tagua nuts and sea shells until things come back online? How can this be an e-sucre when there is no sucre anymore? It's not. It's essentially an e-dollar. But what it ultimately is, is naïve and dangerous for the populous, and great for the bankers.

OceanHideaway
  5/29/2014 21:15 EST

Two streams...

One e-Cash (convertable to regular bills)

the other

Regular hard cash

Reread the article.

It is creating a parallel financial market ...similar to an e-Buck market, wich is why I cautiously referred to it as an e-Sucre... that wasnt "Them" it was me

Halcwhitley
  5/29/2014 21:33 EST

I have to agree with tomlynch about the dangers of a cashless society. Ecash at some point includes data gathering for a host of reasons. One of which is to sell your data for sales leads. Sorry, but this would lead to a giant rabbit hole that none of us want to go down. A simple Ecuadorian cash backed by gold and/or silver would eliminate the need for American or any other foreign currency. How about we call this new cash the Ecuadollar!

nickspm
  5/29/2014 23:31 EST

The Ecuadorian Constitution was changed several years ago under Correa in order to make the central bank less independent.

Independent in this context means unaccountable to the Ecuadorian government, the legal system, and the citizens.

So now the central bank is accountable in Ecuador.

Contrast this with the Federal Reserve in the United States---a central bank that is completely independent and therefore unaccountable to the nation, the citizens, or the rule of law of the United States.

Ecuador is still bound to the dollar---for now---but the country isn't held hostage to the whims of a central bank that is above the law of the land...

At first glance, this whole e-cash idea seems like a bad idea for Ecuador to adopt as national policy. However it is possible that this e-cash system is being set up in order to help Ecuador participate with the BRICS nations in creating an alternative to the IMF's SWIFT banking network.

This could allow Ecuador to comply with FATCA on one hand ---while refusing to hand over sensitive proprietary information that falls outside of the SWIFT system, regardless of weather the customer is Ecuadorian, American or Lithuanian.

OceanHideaway
  7/24/2014 19:24 EST

For folks interested in another article about E Cash in Ecuador... here is another article from back in May of this year.

BrandonBP
  7/25/2014 00:51 EST

Ocean, your last link isn't coming through for me.

This is my first time seeing this thread. And this bothers me for this reason... There will now be a government record of all your transactions. Perhaps the Ecuadorean gov't has the best intentions and won't abuse that information. But I'm dubious whenever governments want to track our personal wealth. I'm not a drug trafficker or money launderer, but I don't have to be to wish that a higher entity doesn't review my personal financial transactions. It isn't their business, and we shouldn't cede them that power.

I'm not a citizen of Ecuador yet, but I wish to be someday. And I hate to see the Ecuadorean government giving me the same reasons I wish to abandon my U.S. homeland. Is it not too much to ask that my government not keep tabs on everything I do?

remoore2001
  7/25/2014 11:12 EST

The way I see it is now that the genie is out of the bottle as far as gov'ts being able to spy on their own, all gov'ts will be doing it. If people think the US is the only country keeping tabs on their own, your kidding yourself. As long as it is an advantage to people in power to know what their enemies and friends are doing they will take advantage. Nobody who enjoys power and prestige can say no to technology.

gesanders
  7/25/2014 14:42 EST

Agree with you 100%. This is Capital Controls and it reminds me of the coupon days of the Soviet Union. Let's not fool ourselves, the deficit gap has grown and the country is finding it difficult to borrow, so they are making drastic changes. In part inflation has been exported globally by the Japanese and US primarily but also UK and European, Swiss central banks. Those able to print currencies that are part of the currency index.
Doubt very much that South America or Latin America will ever institute fiscal unity, so a common currency will fail. We just need look at the Euro and the problems emanating from that experiment.
Noticed that the law passed yesterday also has powers to cap the salaries of bankers in the private sector.....
Panama today introduced price controls. They have used the U$S for 111 years and inflation is causing them problems so the newly elected President is making the same mistake that countries all over the world have tried and failed to obtain results. Shelves are empty as a result according to the piece I just read.

kellergroupco
  7/26/2014 09:52 EST

It's getting to the point that the safest haven is the Canadian or Australian dollar. China takes and takes and takes.....doesn't know how to give. That's financial security?? Does anyone REALLY think that any association with Russia will be good, long term or short term....on ANY basis?? And as far as the U.S. goes, we should give our heads a shake. Future there? We don't even have leadership let alone credible growth. Forecasts are all B.S.!!!! Maybe we should stick any money, any currency we have under our pillow. It worked in the 50's...maybe it's becoming viable now??

remoore2001
  7/26/2014 12:11 EST

Keller: I thought we were discussing Ecuador

ANITAHAT2
  7/29/2014 16:53 EST

Hi Everyone! I'm just entering this forum today so not sure how it all works but here's the scoop........I'm planning on spending some real time in Ecuador Again!, Cuenca being my base , to travel and see more of this country that I visited, explored, climbed & created, while researching the Panama straw hat 20 years ago. I know things have changed, so I would love to chat with you about those changes and the quality of your lives since you moved there. I spent one day in Cuenca, on the Panama Hat Trail that I was on at the time. I swore I would return and now it's that time, so looking forward to connecting with all those who can dig it!

withoutego
  7/29/2014 19:49 EST

ANITAHAT2

I quote,

"to travel and see more of this country that I visited, explored, climbed & created, "

You've provoked my curiosity, which part of Ecuador did you create? A sidewalk pot hole in Cuenca or a volcano further north? Maybe a river?

sinego

Hwy101
  7/29/2014 21:45 EST

ANITAHAT2 come on back, meet you at a Gringo night somewhere ...

ANITAHAT2
  7/30/2014 03:34 EST

Ha ha.... Sorry for the misunderstanding on creation. I meant that I was very creative while in Ecuador as I am a designer & make unique hats. My research in Ecuador was all about that 20+ years ago which led me to much success in U S, Europe & Japan. So looking forward to returning....:)

PackingMyBags
  7/30/2014 03:52 EST

Back to the topic of currency controls and electronic transactions..... Anyone interested in this should consider reading a recently published book by James Rickards called "The Death of Money: The Coming Collapse of the International Monetary System".

I'm just finishing it now and it is very educational and eye-opening. No conspiracy theory stuff. The author is very much an insider, having worked at Citibank, Long-Term Capital Management, and on financial-related projects for the Dept of Defense for the US intelligence community.

I predict we're all going to hear a lot more about IMF-issued SDRs the next time the dollar has a hiccup.

withoutego
  7/30/2014 08:05 EST

Staying on theme - didn't Freud equate money with Caca....which sounds a lot like Caja ? Is there anything in that ?

sindinero

remoore2001
  7/31/2014 15:44 EST

Does Mr Richards accept greenbacks for his book. Enough said

tomlynch
  7/31/2014 17:32 EST

It's Rickards... Yes, he accepts dollars, but he does not use them as a store of wealth.

OceanHideaway
  8/2/2014 05:46 EST

...no he uses them IN a store AS wealth...

Or...he uses bitcoin...

But you can´t use bitcoin in Ecuador!

Only Ecuador E-cash and now...back to your regularly scheduled propoganda!

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