At the beginning of the year 2000 the reigning constitutional president of Ecuador, Dr. Jamil Mahuad introduced a bill of dollarization to the Ecuadorian people. It meant to adopt the mighty US Dollar (at least at that time) as official currency of the country (like in Panama which already had the USD). The year 1999 was a period 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. Thus this dollarization scheme was perceived by the hierarchy to save the country and the president from more calamities. It did not work for the president, who was deposed by a mostly indigenous uprising (with some 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. Vice president Gustavo Noboa took over the precarious job of top leader of the country and continued the dollarization plan of his predecessor.  The scheme finally won approval of the parliament and went officially into effect in March, 2000.
10 years later with a more leftist government in power some rumblings surface to abandon the USD again and convert back to the Sucre or introduce a common South American currency (like in Europe). But as of now there are only rumors without valid validations.

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

Bring only money in US currency
 
Other currencies, like the Euro, Yen, British pounds, Canadian dollars, etc... can be changed in some banks in Quito or Guayaquil but only with a considerable discount. Euro is however becoming more known and street changers will take it but also not at a very good rate. If you come by land from Peru or Colombia, change money at the border but beware of money changers who like to give you false bills.

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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. And, part of the reason so many people keep savings, perhaps Mozo savings accounts is so they'll have cash when traveling. 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, very few accept 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 cannot accept them anymore because of that.


Credit cards and Debit cards

I do not recommend credit cards as many small and medium sized businesses do not accept them. Bigger businesses accept them (only VISA and MasterCard) but often apply a 8 -10% surcharge. Only the major airline companies and expensive restaurants and shops 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 ATM machines in Quito and other larger cities which have Cirrus and give you up to $500 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 in other centers of the country but they charge hefty commissions for money transfers.