The authorities of the Central Bank of Bolivia have finally decided to lift the ban on Bitcoin that has been active in this Latin American country since 2020.
In a historic turn, the Central Bank of Bolivia has lifted the blanket ban on the use of Bitcoin and other cryptocurrencies in its national financial system. This decision, which repeals a 2020 resolution, opens the door to the integration of exchanges and other crypto service providers into the Bolivian economy.
La Resolution No. 082/2024, issued on Tuesday, removes any prohibitions related to these assets, allowing the intermediation of financial institutions to complete payments and acquire these assets. This measure reverses the Resolution No. 144/2020, which prohibited financial institutions from using, authorizing or intermediating payments to acquire or sell these assets, effectively blocking the entry of cryptocurrencies into Bolivian markets.
The Bank, through its account in X, clarified and made public this new position, which strengthens the situation of cryptocurrencies and crypto service providers in this nation.
Reasons for change of position
The Central Bank's change of position is due, in part, to the recommendations of the Financial Action Task Force of Latin America (FATF), which urged Bolivia to consider regulating virtual asset service providers (VASP) in accordance with its public policy.
Edwin Rojas Ulo, president of the Central Bank, stated that this new decision will provide the population with a "additional mechanism that will contribute to strengthening financial and commercial activities."
This move is expected to boost the creation of a clear regulatory framework for cryptocurrencies in Bolivia. Regulation could range from the creation of licenses for exchanges and crypto service providers to the implementation of measures to prevent money laundering and terrorist financing.
A positive measure
The impact on the Latin American crypto ecosystem could also be significant. Bolivia’s decision could encourage other countries in the region to reconsider their stance on cryptocurrencies, boosting the adoption and development of the industry in Latin America.
Thus, the user of X, Pedro Rey (@cryptopepe1), founder of the Latin American crypto education platform UTNBlockchain of Argentina, has said that "This measure is positive for Bolivia's crypto sector and opens the door for greater adoption of cryptocurrencies in the country."
Bitcoin and Bolivia: a step forward
It is important to note that, despite the opening to cryptocurrencies, the Central Bank of Bolivia has reiterated that the boliviano (BOB) remains the only legal tender in the country. In addition, it has clarified that digital assets are not legal tender or cash, so users must assume the risks associated with their use and commercialization.
On the other hand, the measure is also positive for Bolivians who will now have a powerful financial tool at their disposal to mobilize their capital and maintain savings, in the face of a national economy that has been suffering greatly since the arrival of the new government. In fact, the political and economic situation of the nation is so delicate that just 24 hours ago, the government suffered an attempted coup against the current president Luis Arce.
Bolivia is currently the nation with the highest country risk in Latin America, above Argentina and El Salvador, both of which have significantly improved this indicator. Added to this is the increasing risk of defaults, banking problems and the possibility that the government will implement strong exchange controls, all perfect ingredients to boost the adoption of cryptocurrencies, as has happened in Argentina and Venezuela, which have already experienced this situation.
In short, the decision by the Central Bank of Bolivia marks a milestone in the history of cryptocurrencies in Latin America and opens a new window for the citizens of this nation. While the details of the regulation are still to be defined, the country's opening to Bitcoin and other cryptocurrencies has the potential to transform the financial landscape and foster innovation in the region.
