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Cryptocurrency Adoption in Latin America: Bolivia Lifts 4-Year Ban
Cryptocurrency adoption continues to expand in Latin America as more countries embrace cryptocurrencies and digital assets. Recently, Bolivia announced that it had lifted its four-year ban on cryptocurrencies to “modernize the payment system.”
Bolivia is about to revolutionize its payment system
On June 26, the Central Bank of Bolivia (BCB) revealed had revoked its previous resolution banning the use of cryptocurrencies in the country. Council resolution no. 144/2020, issued on December 15, 2020, prohibited “the use of electronic payment channels and instruments (IEP) for purchase and sale transactions of virtual goods”.
The new Council Resolution No. 082/2024 allows financial institutions to carry out transactions with cryptocurrencies. The decision was made in collaboration with the Financial System Supervisory Authority (ASFI) and the Financial Investigations Unit (UIF), taking into account the Mutual Evaluation of the Plurinational State of Bolivia 2023 – 2024 carried out by the Latin American Financial Action Task Force (GAFILAT).
BCB's press release annoucing the ban lift. Source: Banco Central de Bolivia on X
After the assessment, GAFILAT recommended that Bolivian supervisory bodies consider regulating virtual asset service providers (VASPs) “according to public policy to be defined in the Bolivian context”.
The task force also stressed that over the past year the country has been working on a legal basis that “will enable us to address new challenges in this modernization process” and to incorporate cryptocurrency and its regulations in the Bolivian payment system.
The president of the Central Bank of Bolivia, Edwin Rojas Ulo, said that the BCB has constantly worked to modernize the country’s payment system and infrastructure. Rojas Ulo stressed that, with the new Council Resolution, Bolivians will have a new mechanism for financial activities.
The BCB, as part of its policies, has constantly promoted the modernization of the national payments system and the development of the payments infrastructure, making practicable with its actions the adoption of technological innovations and new payment schemes, currently becoming a regional reference in terms of interconnection, interoperability and digital financial inclusion, promoting the active and equal participation of banking and non-banking entities, promoting the democratization of financial services. In this context, Council Resolution no. 084/2024 will provide the population with an additional mechanism that will contribute to the strengthening of financial and commercial activities.
A step towards wider cryptocurrency adoption
According to the press release, ASFI will monitor financial intermediation entities (FIEs), including the means that the entities provide to acquire cryptocurrencies. In addition, it will offer financial education on virtual assets and their risks for the population.
The IUF will supervise preventive measures “to identify potentially suspicious transactions related to the legitimization of illicit profits and the financing of terrorism.” The institution will make “relevant regulatory adjustments” to prevent crime-related transactions with virtual assets.
However, the BCB stressed that the bolivian remains the only legal tender in the country. Unlike El Salvador, which made Bitcoin a legal tender In the country, BTC and other cryptocurrencies “are not cash and there is no obligation on the part of the population” to receive them as a method of payment.
Ultimately, the Central Bank will incorporate the conceptual aspects and risks of using cryptocurrencies into its Economic and Financial Education Plan. This measure aims to promote greater knowledge among the population and allow Bolivians to make informed decisions when using virtual assets.
Bitcoin (BTC) is trading at $61,713 in the five-day chart. Source: BTCUSDT on TradingView
Featured image from Unsplash.com, chart from TradingView.com