At the beginning of the year 2000 the, then still constitutional president of Ecuador, Dr. Jamil Mahuad introduced the bill of dollarization to the Ecuadorian people, meaning to adopt the mighty US Dollar as official currency of the country (like in Panama). After a year (1999) of financial turmoil with a presidential decree of freezing  bank accounts, bankruptcy of 70% of Ecuadorian banks and the fall of the Ecuadorian currency from 8000 to 25000 Sucres to the dollar, this dollarization scheme was seen to save the country and the president from more calamities. It did not work for the president, who was deposed by an mostly indigenous uprising with help from part of the military forces on January 21st of 2000 and the verdict for helping the Ecuadorian economy is still out in the open. Gustavo Noboa, the vice-president of the country took over as the new president and adopted the dollarization plan of his predecessor, which won approval of the parliament as well and so took officially effect in March of 2000.

That's how one Ecuadorian expressed his view about dollarization
by renaming the popular Sucre Park in Riobamba

How does that all affect you as a visitor to Ecuador ?

Bring only money in US currency
 
Other currencies, like the Euro, Yen, Canadian dollars, etc... can only be changed in some banks in Quito or Guayaquil and also only with a considerable discount. If you come by land from Peru or Colombia, change their local money at the border.

Cash and Traveler's checks

Part of your travel budget should be in cash in smaller denominations
( banknotes of 1, 5, 10 and 20s) as you encounter difficulties in getting change with larger ones. Also be aware of false bank notes, which appear more and more in the country, especially 50s and 100s ( but even false one dollar bills and coins are circulating now in the country). That's the reason that many businesses will not accept higher banknotes. As of 2005, nobody accepts anymore one hundred bills as many false100s are in circulation so do not bring them anymore.

Traveler's checks at banks and exchange houses are becoming more and more difficult to change. Many financial institutions do not change them anymore (even in person) and many businesses (including ours) cannot accept them anymore because of that.

Credit cards and Bank cards

I do not recommend credit cards as many small and medium sized businesses do not accept them ( this being the case for us, too). Bigger businesses accept them (only VISA and MasterCard) but often apply a 8 -10% surcharge. Only the major airline companies and expensive restaurants accept them without a surcharge. For cash advances at bank machines VISA and MasterCard charge a 4% commission so in case you will need some fresh cash use your bank debit card with the Cirrus emblem. There are more and more bank machines in Quito who have Cirrus and give you up to $300 in fresh cash. The main advantage with Cirrus is that there is very little commission charge involved (less than 1%) but often you have to go to several places till one dispenses you money so do not be in a hurry. There are also Western Union offices in Quito and other centers of the country but they charge hefty commissions for money transfers.