News
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 4-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 15 December 2020, prohibited “the use of Electronic Payment Instruments (PEI) channels and instruments for the purchase and sale of Virtual Assets”.
The new Council Resolution N°082/2024 allows financial institutions to carry out transactions with cryptocurrencies. The decision was taken 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 Financial Action Task Force Latin American (GAFILAT).
BCB's press release annoucing the ban lift. Source: Banco Central de Bolivia on X
After the evaluation, GAFILAT recommended that Bolivian regulatory bodies consider regulating Virtual Asset Service Providers (VASP) “in accordance with public policy to be defined in the Bolivian context”.
The task force also underlined that during the last year the country has been working on a legal basis that “will allow us to face 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, within its policies, has consistently promoted the modernization of the national payment system and the development of the payment infrastructure, making feasible 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, favoring the democratization of financial services. In this framework, 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 (FEIs), including the means the entities provide to acquire cryptocurrencies. Furthermore, it will offer financial education on virtual assets and their risks for the population.
The IUF will supervise preventive measures “to identify possibly suspicious transactions linked to the legitimization of illicit profits and the financing of terrorism”. The institute will make the “relevant regulatory adjustments” to prevent criminal operations 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.
Finally, the Central Bank will incorporate the conceptual aspects and risks related to the use of 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 resources.
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