Ecuador Central Bank Issues Crypto Warning as Wordcoin Adoption Rises

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Tim Alper

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Tim Alper

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Tim Alper is a British journalist and features writer who has worked at Cryptonews.com since 2018. He has written for media outlets such as the BBC, the Guardian, and Chosun Ilbo. He has also worked...

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August 14, 2024

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The Ecuador Central Bank has warned citizens about the dangers of crypto as Worldcoin (WLD) adoption continues to increase in the Latin American nation.

Per an official Central Bank of Ecuador (BCE) statement and a report from CriptoNoticias, “several thousand” citizens have scanned their irises at Worldcoin offices around the nation.

Ecuador Worldcoin Adoption Continues Apace

The BCE stated that cryptoassets “are not legal tender” in Ecuador. It reminded citizens that the use of crypto as a means of payment method is “expressly prohibited.”

The bank noted that per the regulatory Junta de Política y Regulación Monetaria (Monetary Policy and Regulation Board)’s guidelines, “the [only] legal currency in the Republic of Ecuador is the USD.” The BCE said:

“All transactions, monetary, and financial operations and their accounting records carried out in the country must be conducted in United States dollars.”

The JPRM and the BCE said they wanted to “remind individuals and legal entities that cryptoassets are not legal tender, nor an authorized means of payment in Ecuador.”

And the BCE warned that if it discovers firms or citizens using “cryptoassets as a means of payment,” it will inform the Attorney General’s Office and press for punishment.

However, the bank conceded that per Chainalysis, Ecuador ranks eighth in LATAM for crypto adoption.

The bank also noted that experts think some $7 billion worth of crypto transactions were carried out in Ecuador between June 2022 and July 2023.

The BCE made no mention of WLD or high-cap tokens like Bitcoin (BTC). However, it appears that the rise of Worldcoin in Ecuador has piqued regulators’ concerns.

Worldcoin operators arrived in Ecuador some two months ago. They set up offices in cities like Quito and Guayaquil.

They have since helped “thousands” of citizens scan their irises in exchange for WLD payouts worth around $20.

Worldcoin: Thousands of Citizens Scan Irises

Experts said that each Worldcoin center is now scanning up to 150 citizens’ irises per day. One claimed that many of these people “are in a situation of economic need.”

On August 6, Ecuador’s Superintendency of Companies, Securities, and Insurance said it was “concerned about news circulating in the media and social media networks about irregular activity carried out [by] Worldcoin.”

The Superintendency said Worldcoin was not regulated by the Ecuadoran state and said that it encouraged citizens “not to hand over” their biometric data.

And the Superintendency said it was “not clear” “for what purposes” Worldcoin operators were “collecting and storing this data.”

It warned that Worldcoin’s data gathering “puts the security and privacy of [Ecuadoran] citizens at risk.”

The bank, meanwhile concluded with a warning about the volatility of crypto and said that citizens could expect to make losses if they traded in coins.

“We warn citizens that trading in cryptoassets could generate significant losses due to their high volatility derived from their speculative nature. This has recently been illustrated by significant price falls on international markets.”

Central Bank of Ecuador