The adoption of blockchain technology and asset tokenization is advancing at a rapid pace, but the real engine driving its global development is the existence of a clear, consistent and innovation-friendly legal framework.
Some countries have already established themselves as regulatory benchmarks, establishing specific rules for cryptoassets, DLT infrastructures and token issuance with legal backing. In this article we show you relevant information about blockchain regulation in Ecuador, which you can use as a guide if you are looking to operate internationally or evaluate different strategic locations.
Current legislation on blockchain and virtual assets in Ecuador
Fintech Law Ecuador
Establishes a specific legal framework to regulate digital payments, neobanks, credit and technology insurance. Introduces a regulatory sandbox to test innovative models under state supervision. The objective is to foster financial inclusion, protect the user and modernize the system.
Organic Law for the Prevention, Detection and Eradication of Money Laundering
Establishes the national framework for the prevention of money laundering and financing of terrorism. Includes VASPs as regulated entities. Requires KYC implementation, transaction monitoring and suspicious transaction reporting to the UAFE.
UAFE Resolutions on cryptoassets
Since 2018, the UAFE has issued guidelines for monitoring operations with virtual assets. These resolutions define specific anti-money laundering prevention obligations for VASPs, including compliance policies, personnel training, risk management and periodic reporting.
Law for blockchain and digital assets Ecuador
This Bill seeks to establish a comprehensive regulatory framework for the adoption, secure use and responsible development of blockchain technology, adapting to international trends and local needs. Although the Fintech Law already exists, it recognizes the need for a specific and detailed framework for these technologies.
Tokenization makes it possible to digitally represent real-world assets through blockchain, but for it to have legal value, it is essential that there is a regulatory framework that recognizes this operation. Ecuador adopts its own approach, establishing specific rules for the issuance, custody or trading of tokens. In this block we explain how asset tokenization is regulated from a legal point of view, taking an advanced jurisdiction such as Ecuador as an example.
Asset tokenization regulation in Ecuador
Ecuador does not have comprehensive legislation specific to the tokenization of assets, whether financial or non-financial. If the tokens represent financial instruments, their issuance may fall under the Securities Market Law and the supervision of the Superintendence of Companies, Securities and Insurance (SCVS), applying public offering and transparency requirements. For tokens linked to non-financial assets, such as real estate, art or commodities, the structuring is done under Ecuadorian private law, and the tax and civil obligations depend on the nature of the token and the associated contracts.
The Companies Act allows the tokenization of shares in public and simplified joint stock companies, provided that corporate records are kept on blockchain. There is no general legal recognition for records in DLT technology, although these may have evidentiary value in private disputes. Ecuador has not implemented a regulatory sandbox or pilot DLT regimes for asset tokenization.
Currently, there are bills in the pipeline, such as the Financial Innovation Bill and the Bill for Blockchain and Digital Assets, which seek to establish a comprehensive legal framework and create a National Blockchain Commission. Regulators’ interest in aligning national regulations with international FATF standards is growing.
Financial and Economic Analysis Unit (UAFE)
The UAFE is the authority responsible for the prevention of money laundering and terrorist financing in Ecuador. It supervises the VASPs, issues AML/CFT guidelines and manages the registry of regulated entities. It oversees compliance with monitoring, reporting and analysis of suspicious transactions, and imposes sanctions for non-compliance.
Superintendency of Banks
The Superintendency of Banks of Ecuador issues guidelines on operations with virtual assets in the Ecuadorian financial system. It supervises the entities under its control and requires internal controls over crypto-asset transactions. It also regulates the interaction of VASPs with the banking system, depending on the associated risks, and issues public warnings on the risks of investing.
Launching a business based on digital assets requires more than just technology: it is also necessary to comply with legal requirements such as licensing, registration and regulatory obligations. These conditions ensure that the business model is viable and sustainable over time, and that it complies with transparency and fraud prevention standards. In this section we explore what licenses are usually required and what compliance criteria blockchain companies operating in Ecuador must follow.
What licenses and requirements are needed to operate with cryptoassets in Ecuador?
Registration as a regulated entity (VASP)
In Ecuador there is no specific license to operate as a VASP. However, it is mandatory to register as a regulated entity with the UAFE. This implies complying with AML/CFT policies and controls, reporting suspicious transactions and maintaining internal procedures to mitigate risks associated with the use of cryptoassets.
AML/KYC Compliance
VASPs must apply anti-money laundering prevention policies, customer identification controls (KYC), transaction monitoring and risk management. Compliance with these AML/KYC obligations, under the supervision of the UAFE, is essential to operate legally in the country and avoid administrative or criminal sanctions.
Tax obligations
Activities with cryptoassets are subject to Ecuador’s tax regulations. Taxpayers must declare the income derived from these operations and comply with the corresponding tax obligations. In addition, they must keep adequate accounting records to support their declarations.
Are you exploring developing your blockchain project in Ecuador?
At Metlabs we help companies like yours and offer comprehensive support in the development of blockchain projects and tokenization of assets such as real estate, carbon credits, commodities, intellectual property, financial instruments, franchises and more, fully aligned with blockchain regulation in Ecuador and international regulatory standards.
Contact us and find out how we can help you meeting all your business model needs, from technical validation and structuring to design, development and implementation of custom blockchain solutions, ready to scale from day one.