JPRM-2023-015-M — Regulation of Legal Tender

RESOLUTION NO. JPRM-2023-015-M THE MONETARY AND FINANCIAL POLICY AND REGULATION BOARD

CONSIDERING:

That, Article 226 of the Constitution of the Republic of Ecuador stipulates that public officials and persons acting under state authority shall exercise only the competencies and powers attributed to them in the Constitution and the Law;

That, Article 227 of the same Constitution states that Public Administration constitutes a service to the community governed by principles of efficiency, quality, hierarchy, coordination, planning, among others;

That, numeral 1 of Article 302 aforementioned determines that: "Monetary, credit, exchange, and financial policies shall have as objectives: 1. To supply the necessary means of payment for the economic system to operate efficiently. (...)");

That, the first clause of Article 303 of the Magna Carta determines that the formulation of monetary, credit, exchange, and financial policies is the exclusive faculty of the Executive Function and shall be implemented through the Central Bank of Ecuador;

That, Article 27 of the Organic Monetary and Financial Code establishes: "In accordance with Article 303 of the Constitution of the Republic of Ecuador and other applicable norms, the Central Bank of Ecuador shall implement the monetary policy formulated by the Monetary and Financial Policy and Regulation Board, aimed at fostering and maintaining a stable monetary system, contributing to financial stability, and managing its balance sheet in order to preserve the integrity of dollarization, including the safe, solid, and efficient functioning of payment systems and means";

That, Article 47.1 of the aforementioned Code created the Monetary and Financial Policy and Regulation Board as part of the Executive Function, responsible for the formulation of monetary policy, the highest governing body of the Central Bank of Ecuador, and determines its composition;

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That, Article 47.6 of the same Code, regarding the functions of the Monetary and Financial Policy and Regulation Board, among others, establishes: "(...) 1. Formulate policy in the monetary sphere and observe its application by the Central Bank of Ecuador, to preserve the integrity and sustainability of the dollarization monetary system and the financial system, in accordance with the provisions of this Code; (...) 26. Those others conferred by law (...)";

That, Article 94 of the aforementioned Code prescribes: "All transactions, monetary and financial operations, and their accounting records, carried out in the Republic of Ecuador, shall be expressed in United States dollars, in accordance with this Code. The circulation, exchange, and withdrawal of United States dollars, as well as the minting and demonetization of national fractional coinage in the Republic of Ecuador, correspond exclusively to the Central Bank of Ecuador. The Central Bank of Ecuador is the only entity authorized to provide and manage national fractional coinage in the Republic of Ecuador, equivalent and convertible to United States dollars, backed by Reserve assets. The currency determined in this article is a means of payment. The currency has liberatory power and legal tender status in the Republic of Ecuador within the framework of the regulations issued by the Monetary and Financial Policy and Regulation Board. Under no circumstances shall the State oblige a natural or legal person of private law to receive currency other than the United States dollar";

That, it is the faculty of the Monetary and Financial Policy and Regulation Board to expressly regulate the regulatory framework of the legal tender of the Republic of Ecuador, derived from the formulation of monetary policy, with the purpose of preserving the integrity of dollarization;

That, the Monetary and Financial Policy and Regulation Board, in an extraordinary session held virtually, on August 9, 2023, reviewed the proposal sent via memorandum No. BCE-BCE-2023-0190-M, dated August 8, 2023, by the General Manager of the Central Bank of Ecuador to the President of the Monetary and Financial Policy and Regulation Board, as well as the legal report No. BCE-CGJ-053-2023, dated August 8, 2023; and,

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In exercise of its functions and in accordance with Article 47.7 of the Organic Monetary and Financial Code, the Monetary and Financial Policy and Regulation Board resolves to issue the:

REGULATION OF LEGAL TENDER IN ECUADOR

SINGLE ARTICLE.- The legal tender in the Republic of Ecuador is the United States dollar. All transactions, monetary and financial operations, and their accounting records, carried out in the country, shall be expressed in United States dollars.

FINAL PROVISION.- This resolution shall enter into force as of the present date, without prejudice to its publication in the Official Register. The Directorate of Documentary Management and Archive is entrusted with its publication on the institutional website of the Central Bank of Ecuador.

NOTIFY AND PUBLISH. - Given in the Metropolitan District of Quito, on August 9, 2023.

THE PRESIDENT Dr. TATIANA MARIBEL RODRÍGUEZ CERÓN

The aforementioned resolution was signed by Dr. Tatiana Maribel Rodríguez Cerón - President of the Monetary and Financial Policy and Regulation Board, in the Metropolitan District of Quito, on August 9, 2023.- I CERTIFY.

ADMINISTRATIVE SECRETARY Attorney MARÍA ALEXANDRA GUERRERO DEL POZO