By Nathan Gill
Ecuador President Rafael Correa, a critic of his nation’s use of the U.S. dollar as its official currency, is now creating a government-backed digital tender. One of the intellectual architects of the nation’s switch to the greenback 14 years ago sees a red flag.
With the country facing a record budget shortfall, a new currency may undermine confidence in the monetary system, said Steve Hanke, a professor of applied economics at Johns Hopkins University, who advised Ecuador on adopting the dollar in the late 1990s and early 2000s. His concerns were echoed by Ruth Arregui, a former general manager at the central bank, and the University of Georgia’s Myriam Quispe-Agnoli, who wrote about dollarization as an economist at the Federal Reserve Bank of Atlanta.