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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. Bolivia recently announced that it has 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 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 regulatory bodies consider regulating Virtual Asset Service Providers (VASPs) “according to public policy to be defined in the Bolivian context”.
The task force also highlighted that over the past year the country has been working on a legal basis that “will enable us to address the new challenges in this modernization process” and to incorporate Cryptocurrencies and related regulations in the Bolivian payment system.
The president of the Central Bank of Bolivia, Edwin Rojas Ulo, said that the BCB has worked continuously to modernize the country’s payment system and infrastructure. Rojas Ulo emphasized that with the new Council Resolution, Bolivians will have a new mechanism for financial activities.
The BCB, within its policies, has continuously promoted the modernization of the national payment system and the development of payment infrastructures, enabling with its actions the adoption of technological innovations and new payment schemes, becoming today 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 (FIEs), including the means that the entities provide to acquire cryptocurrencies. In addition, it will offer financial education on virtual resources and the risks they pose to the population.
The IUF will oversee preventive measures “to identify potentially suspicious transactions related to the legitimization of illicit profits and terrorist financing.” The institution will make “relevant regulatory adjustments” to prevent criminal transactions with virtual assets.
However, the BCB stressed that the Boliviano remains the only legal tender in the country. Unlike El Salvador, which has 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 payment method.
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