Ecuador is on track to be the first country to have its own digital currency. Distribution of the currency is aimed for December of this year.

This currency looks to wean the country off the use of American dollars as its primary currency, since the value of Ecuador's own - the sucre - was destroyed following the banking crisis of 1998 to 1999.

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The value of the new digital currency will be equivalent to the dollar on the universal currency exchange. It will be backed by liquid assets and will rely on demand in dictating how much of it will enter the marketplace.

Ecuador's President, Rafael Correa, views this digital currency as a way to help pay off debt and the poor who are not in the loop with traditional banking. The public's debt is at its highest level since 2010.

While it is an interesting concept that has noble intentions, Jeremy Bonney, product manager of Coin Desk, says that it does have its drawbacks.

It may be cheap to disseminate and use without the need to invest in infrastructure and logistics, it will also be hard for people to adopt and trust the new concept of money.

There are also hidden costs that must be taken into account and understood, while the centralized digital currency - one that is controlled by the state's central bank rather than other market forces - is an easy target to replicate and counterfeit.

Therefore, an investment on cyber protection is required in order to make it work successfully.

Bitcoin for example, relies on powerful computers and sophisticated cryptography to stay safe and secure.

The Ecuadorian government has now banned Bitcoin in favor of their own digital currency. However, if the concept does not pick up, they will have real physical dollars waiting and ready.

TagsEcuador, Digital Currency, Rafael Correa