Earlier this year, the government of Ecuador launched Sistema de Dinero Electrónico, a government-owned digital cash system that allows individuals to exchange cash for digital money, which can be stored on mobile phones to pay for goods and services such as taxi fares. The aim of the initiative is to promote financial inclusion and to decrease transaction costs in the country. Additionally, the government aims to reduce the usage rate of US dollars, the physical currency used in the country, in an effort to decrease the cost of currency circulation.
Diego Martinez, an economist with central bank of Ecuador, said that “[…] we wanted it to be a democratic product. In any other countries, it is provided by private companies, and it is expensive. […] What we have here is something everyone can use regardless of the [mobile phone] operator they are using”[1].
In Ecuador, cash transactions constitute 40 percent of payments. During the first six months of the operation of Sistema de Dinero Electrónico, approximately 47,800 individuals have used the system via 12 banks. The usage fees range from 2 cents to 10 cents depending on the amounts converted.
By Alíz Crowley, Research Associate
Sources and Additional Resources
[1] Fast Company, Ecuador Is The World’s First Country With A Public Digital Cash System
[2] Sistema de Dinero Electrónico, Website
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