Noboa declares the dollar Ecuador’s only currency following new discussion of the digital ‘ecuadollar’

President Daniel Noboa on Tuesday issued an executive decree ratifying the U.S. dollar as Ecuador’s only legal currency. “An alternative currency cannot coexist with the U.S. dollar,” the decree said, and “prohibited any attempt to implement parallel payment systems in the public or private sectors.”

Former president Rafael Correa

The decree followed Monday comments by Citizens Revolution Assemblywomen Paola Cabezas and Paola Cabezas supporting the establishment of a digital “ecuadollar” to be used domestically in parallel with the U.S. dollar. The concept was first proposed by former president Rafael Correa and revived more recently by Correista presidential candidate Andres Arauz.

In a radio interview, Noboa claimed that the adoption of a second currency not backed by dollars would “destabilize” the economy and said efforts should be made to strengthen the dollar, not weaken it.

“So now, again, there is talk of ecuadollars, an Ecuadorian-style dollarization,” he said. “What are they looking to do? In this case, our opponents are trying to establish an alternative payment measure for internal use. They even talk about taking real dollars away from Ecuadorians.”

Noboa claimed “an unbacked digital currency” would create mistrust among those who receive it, since they would have no guarantee of its market value. “Many Ecuadorians remember the sucre and the suffering that currency created before it was replaced 25 years ago,” he said. “Adoption of the ecuadollar would end up completely demolishing Ecuador’s economy.”

Noboa said voters will hear much more about the “importance of the U.S. dollar” in the final weeks of the presidential campaign.

Following announcement of the decree, Correa called Noboa “Caligula” on his social media account, adding: “he believes that a decree of his has more weight than a constitutional article. Who are your legal advisors? Curly, Larry and Moe?” Later Tuesday, in a Spanish radio interview, Correa defended the idea of a digital currency, claiming “it was a good idea 10 years ago and remains a good idea today.”

In an interview on the internet blog La Contra, Citizens Revolution candidate Luisa González attempted to distance herself from the debate, calling the ecuadollar a “distraction” from more important issues. “My colleagues Gissela Garzón and Paola Cabezas became entangled in a topic that they did not fully understand,” she said, adding that she respects their right to their personal opinions.

González said she would not pursue the ecuadollar plan if she is elected. “The dollar is our currency and it will stay that way,” she said.