Bolivia’s central bank has decided to lift the ban on payments using Bitcoin and other cryptocurrencies introduced in 2014. The country is trying to balance its economy while modernizing its payment systems. Bolivia has become the latest Latin American country to take a pro-crypto stance, although Bitcoin or other cryptocurrencies have yet to be recognized as legal tender in the region. The central bank will also allow banks to conduct crypto transactions — a restriction that was introduced in 2020.
Bolivia’s new stance on cryptocurrency and crypto transactions
In a statement released on Wednesday, Banco Central de Bolilvia announced that it is lifting the country’s ban on cryptocurrency payments, including bitcoin transactions. The decision was made in cooperation with the Financial System Supervisory Authority (Autoridad de Supervisión del Sistema Financiero) and the Financial Investigations Unit (Unidad de Investigaciones Financieras).
According to Statista, between 2024 and 2029, Bolivia’s national debt is projected to increase by $21.2 billion (approximately 1,76,746 million rupees).
The Bolivian Bank has decided to allow banks to use approved electronic channels and facilitate crypto payments. Although Bolivia’s central bank has yet to recognize Bitcoin or other cryptocurrencies as legal tender, allowing these transactions could bring the country more in remittances as cross-border crypto transactions are instant and usually free.
In addition, Bolivia is taking steps to reduce its dependence on the US dollar, particularly after successive interest rate hikes in recent months announced by the US Fed to deal with the economic downturn following the pandemic. In July 2023, Bolivia reportedly challenged the dominance of the US dollar by focusing on the Chinese yuan and the Russian ruble.
Other countries in Latin America have doubled down on cryptocurrencies
El Salvador became the first in the world to legalize Bitcoin as a legitimate currency back in September 2021. Salvadoran President Nayib Bukele continues his efforts to turn the country into a fully pro-BTC region, full of crypto businesses opening up shop in Brazil is another country that is has taken pro-crypto steps in recent years.
