The impact of cryptocurrencies on accounting and financial transparency in Ecuadorian companies: an analysis of the challenges and opportunities

Abstract

This study examines the impact of cryptocurrencies on accounting and financial transparency in Ecuador, with a particular focus on lessons learned from El Salvador’s adoption of Bitcoin as legal tender. Since the introduction of Bitcoin in 2008, cryptocurrencies have challenged traditional financial paradigms, offering both significant opportunities and substantial challenges worldwide. In Ecuador, where cryptocurrencies lack clear regulatory frameworks, their integration into accounting practices has led to considerable uncertainty, particularly in terms of valuation and financial reporting. To address this issue, a documentary methodology was employed, involving a comprehensive review of academic literature, regulatory frameworks, and relevant case studies. The findings indicate that while cryptocurrencies have the potential to enhance financial transparency through blockchain technology, their volatility and the absence of specific regulations present significant challenges for Ecuadorian businesses. The analysis of El Salvador's experience reveals that although Bitcoin adoption has promoted financial inclusion, it has also exposed vulnerabilities in economic stability and transparency. The study concludes that Ecuador could benefit from a robust regulatory framework that balances innovation with financial security, alongside training programs for accountants and financial professionals. This research provides a solid foundation for future studies and policies that will facilitate the safe and effective integration of cryptocurrencies into Ecuador’s financial system, aligning the country with global trends in digital finance.