Top-Down Digital Currency Coming to Ecuador, with Ban on Competition

By: Belén Marty - @belenmarty - Jul 23, 2014, 9:21 am

EspañolEcuador’s Congress, dominated by the ruling socialist PAIS Alliance, is on the verge of approving a new reform, presented by President Rafael Correa as an urgent matter. The law is for the creation of a digital currency and financial-regulation system controlled by the executive. At the same time, it prohibits any digital currency emitted by institutions other than the nation’s central bank.

Debate over the reform began at 9.30 AM local time on Tuesday, after 62 amendments from the Assembly’s Economic Commission. These came after Correa presented the original version on June 25, but none of the changes are structural or overturn the intent.

The Assembly will resume analysis of the monetary code on Thursday.

Minister of Economic Policy Patricio Rivera said that “with this new code we hope the banking industry will collaborate with the people, and not the people for the banking industry, which is what has been happening since the 1990s.”

According to the bill’s Article 99, the Monetary and Financial Regulatory Committee will regulate the digital currency, and the Central Bank will handle its implementation, development, and evolution.

Opposition Representative Ramiro Aguilar, in a show of support across party lines, affirmed during the committee’s Saturday session that “the provision of a digital currency will be backed by its liquid assets” (presumably with cash reserves). “I think this will give the country some calm,” he added.

Innovation, Privacy within a Monopoly?

Cryptocurrency enthusiasts fear the second element of this proposal. In addition to a digital currency to work alongside the US dollar (Ecuador’s official currency since 2000), the central government is set to prohibit the “emission, production, initiation, falsifications, or any other type of [digital currency] simulation, and its circulation through any channel or way of representation,” as stated under Article 96.

Beyond digital currencies, Article 96 of the reform prohibits the circulation and acceptance of all currencies not authorized by the Monetary and Financial Political Regulatory Committee: “Violations of these prohibitions will be sanctioned according to what is stated under the country’s Penal Code, and whatever is found will be confiscated along with the purchased products.”

Congressman Carlos Viteri presents during the second debate on the digital currency.

The Bitcoin Community of Ecuador sent a statement of concern to the Assembly. They want representatives to take into consideration the proposed legislation’s threat to the privacy of Ecuadorians and to their freedom to use decentralized cryptocurrencies, such as bitcoin and litecoin.

In their open letter, they also request that the committee include a clause that distinguishes personal data from the digital-currency transactions system.

“Ecuador, as a pioneer in the creation of a digital state-run currency, must use methodologies that respect fundamental rights. The digital-currency system must be verifiable, and its code must be published as free software, to ensure the system’s privacy through algorithms,” states the letter.

On the basis of voluntary exchange, they ask that decentralized cryptocurrencies be excluded from Article 96, which prohibits the emission and circulation of unapproved currencies.

Luis Nuñez, a member of Ecuador’s Bitcoin Community told the PanAm Post that “If what will be emitted is a national digital currency, then they must separate personal data from transaction data. At the design level, more than at the political level. History has shown us consistently that politics can be revoked at any time, and [the reform] will not necessarily fulfill its purpose, which is why we require the incorporation of a privacy algorithm and for the code to be verifiable.”

He explains that the Ecuadorian Constitution is clear with respect to the right to privacy. This includes any form of communication.

With regards to the project’s other regulatory implications, the Monetary and Financial Regulatory Committee are set to have the authority to police credits traded by non-financial. Their task will be to prevent abuses, excessive prices, and an economic crisis.

A vote is set to take place on Thursday, with near-certain approval. The amended bill will then be in the hands of the executive branch.

Translated by Anneke Ball.

Editor’s note: the English version includes updated material, in addition to what appears in the Spanish from the previous day.

Belén Marty Belén Marty

Belén Marty is the Libertarian Latina, a journalist based in Buenos Aires, Argentina. She has lived in Guatemala, Jordan, the United Arab Emirates, and the United States and is a former candidate for local office with Argentina's Libertarian Party. Follow @BelenMarty.

The Moral Universe Is with Oswaldo Payá, Harold Cepero

By: John Suarez - Jul 22, 2014, 6:00 pm

EspañolI have not lost faith. I'm not in despair, because I know that there is a moral order. I haven't lost faith, because the arc of the moral universe is long, but it bends toward justice." ~ Martin Luther King Jr. Ebenezer Baptist Church, April 30, 1967. Today marks two years since Oswaldo Payá Sardiñas and Harold Cepero Escalante were last seen alive before a car crash at 1:50pm EST on July 22, 2012. The Sunday afternoon incident involved a second vehicle, driven by Cuban state security. The moment that I learned of what happened is burned into my memory, as if it were yesterday. In the two years since, the Payá family and members of the Christian Liberation Movement have sought through all channels available to push for an international investigation into the deaths of these two activists. The Washington Post editorial board, on the eve of the two year anniversary, published what is now known publicly: The car spun out of control after being rammed from behind by a vehicle bearing state license plates, according to Mr. Carromero. While he and the associate from Sweden survived, Mr. Payá and Mr. Cepero were killed. Mr. Carromero says he was then coerced to confess and subjected to a rigged trial in order to cover up what really happened. Mr. Carromero’s videotaped “confession,” broadcast on television, was forced upon him; he was told to read from cards written by the state security officers. He was sentenced to four years in prison for vehicular homicide and later released to return to Spain to serve out his term. The cover up of this extrajudicial killing carried out by the Cuban state security service has crumbled. Eventually a regional or international human rights body will produce a credible and independent report on the events that transpired on July 22, 2012, and hold the Cuban government responsible. The facts surrounding what happened are in the public domain, so can be legally analyzed and judged based on their merits. Respected international leaders, Nobel prize winners Desmond Tutu and Lech Walesa among them, have called for an international investigation. It won't be the first time. Nine days ago, the world marked 20 years since the attack and sinking of the 13 de Marzo tugboat on July 13, 1994, that claimed 37 lives. There was an investigation on the merits. The Inter-American Commission on Human Rights, in a report released on October 16, 1996, concluded that what transpired that early morning “was not an accident but rather a premeditated, intentional act” by agents of the Cuban government. They hold the Cuban State responsible for violating the right to life of all the people who were shipwrecked and perished as a result of the sinking of the 13 de Marzo. These events occurred just seven miles off the Cuban coast on July 13, 1994. Nevertheless, two decades later, the men responsible, despite being identified, have not been held accountable in a court of law. Three years later the Inter-American Commission on Human Rights on September 29, 1999, released a report on the February 24, 1996, Brothers-to-the-Rescue shoot down. They concluded that "Cuba is responsible for violating the right to life … to the detriment of Carlos Costa, Pablo Morales, Mario De La Peña, and Armando Alejandre, who died as a result of the direct actions of its agents on the afternoon of 24 February 1996 while flying through international airspace." The Cuban state lost a civil judgement to the families of the victims in US courts. A Cuban spy, Gerardo Hernandez, was also arrested in 1998 and sentenced to life in prison for conspiracy to commit murder for his role. Nevertheless, the men who gave the orders and pressed the trigger that blew two civilian planes out of the sky have yet to be held accountable in a court of law. In the meantime, Cubans and friends of freedom around the world are remembering the legacy of Oswaldo Payá Sardiñas and Harold Cepero Escalante. Masses are planned in Havana, Madrid, and Miami, to give thanks for their lives and their nonviolent legacy that continues to demonstrate that love is stronger than hate. Across social media, people of goodwill are making the sign of Liberation and displaying two candles in memory of Oswaldo and Harold. Despite harassment and death threats against the Payá family that forced them to seek refuge in exile and rising repression — including machete attacks against members of the Christian Liberation Movement — the movement has continued on the island to carry on Oswaldo's legacy of nonviolent resistance. The Payá family and the Christian Liberation Movement in the diaspora have continued together to support their counterparts in Cuba and lead the struggle for justice for Oswaldo and Harold. It is said that justice delayed is justice denied, and where a statue of limitations is involved that may be true. But when it comes to murder, only a few countries, such as Colombia and until recently Japan, have an end date to pursue murderers. Cuba does not have such a provision. In the case of the Czech Republic, one of the most notorious cases is that of Milada Horakova. She was hanged with three others in Prague’s Pankrac Prison, as a spy and traitor to the Communist Czechoslovakian government, on June 27, 1950, after a show trial. That same prosecutor who presided over the show trial faced trial for murder 57 years later, and was found guilty and jailed. Reverend King is right "the arc of the moral universe is long, but it bends toward justice." History has already condemned these crimes, and it is highly probable that a court of justice will eventually do so as well. Keep the faith, do not despair, and continue to show your solidarity with victims of repression.

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