Stablecoin issuer / redeemer in Ecuador

Not Classified as E-money/Payment Tokens/Securities (for private stablecoins seeking to function as currency): Ecuador's legal framework, particularly Resolution No. 001-2014-M issued by the then Monetary and Financial Policy and Regulation Board (Junta de Política y Regulación Monetaria y Financiera - JPRF), explicitly states that cryptocurrencies (including by implication stablecoins that aim to serve a monetary function) are not legal tender and are prohibited from being issued, regulated, or operated as a means of payment within the national financial system.

This resolution reserves the exclusive right to issue money to the Banco Central del Ecuador.

Resolución No. 001-2014-M de la Junta de Política y Regulación Monetaria y Financiera (JPRF), Article 1, Paragraph 2 states: "Queda prohibida la emisión, regulación y operación de monedas virtuales o criptomonedas, cuyo fin sea la intermediación financiera o la realización de pagos, a través del sistema monetario y financiero nacional. El Banco Central del Ecuador es el único que puede emitir dinero y medios de pago para la circulación en el país."

As an Asset: While their use as a payment method is prohibited, the trading or holding of cryptocurrencies (including stablecoins) as a private asset or speculative investment in foreign jurisdictions is not explicitly regulated within Ecuador as long as they do not attempt to function as currency within the national financial system. However, any local entity facilitating such trading would operate in a significant legal grey area.

None for Private Stablecoins: Since private stablecoins are largely prohibited from operating as a form of payment or money within Ecuador, there are no specific reserve requirements for them. The BCE maintains reserve requirements for traditional financial institutions and the national financial system.

Prohibited for Private Issuers: No licensing regime exists for private stablecoin issuers because their issuance and operation as a means of payment are prohibited. Only the Banco Central del Ecuador has the authority to issue money and payment instruments. Any entity attempting to issue a stablecoin for use within Ecuador's financial system would likely be in violation of the Código Monetario y Financiero (CMF) and the aforementioned JPRF Resolution.

Código Monetario y Financiero (CMF): This comprehensive law governs the monetary and financial system. Articles related to the BCE's exclusive right to issue money and regulate the financial system underpin the prohibition.

Not Applicable: Given the general prohibition on private stablecoins functioning as money, there are no established redemption rights under Ecuadorian law for such instruments within the national financial system.

Resolución No. UAFE-DG-2022-0001 (Resolution No. UAFE-DG-2022-0001)

Identification and Verification of Customer Identity:

Beneficial Ownership (BO) Identification:

Develop and implement a risk assessment framework to identify, assess, and mitigate ML/TF risks.

Apply enhanced due diligence (EDD) for higher-risk customers (e.g., Politically Exposed Persons - PEPs, customers from high-risk jurisdictions, complex or unusually large transactions, new technologies and products that favor anonymity).

Reporting Obligation: Any transaction, attempted transaction, or activity that raises suspicion of money laundering or terrorist financing, regardless of the amount, must be reported.

No Tipping-Off: VASPs and their employees are prohibited from disclosing to the customer or any third party that a report has been or will be submitted to UAFE.

Transaction Records: All details of virtual asset transactions (e.g., amount, type of virtual asset, sender/recipient addresses, timestamps, fiat currency equivalents, transaction hashes).

Taxable Events: Any gain derived from cryptocurrency is likely to be considered taxable income. This includes:

Individuals (Personas Naturales): Profits are added to other taxable income and subject to progressive income tax rates. These rates vary annually and are published by the SRI.

Businesses (Sociedades): Corporate profits, including those from cryptocurrency activities, are subject to the standard corporate income tax rate, which is generally 25% for most companies, though certain circumstances (e.g., reinvestment) can lead to reduced rates.