Bolivia’s central bank, the Banco Central de Bolivia, has reversed its restrictive stance on cryptocurrencies from 2014 and now permits financial institutions to process digital transactions. This decision seeks to stimulate the Bolivian economy and align the country with surrounding Latin American crypto regulations. Despite this shift, the government does not acknowledge cryptocurrencies as legal tender, suggesting that businesses are not obligated to accept them as payment.
This legislative development comes after last year’s decision to prohibit banks from involvement with digital currencies according to Board Resolution N°144/2020. Under the new rules, transactions with cryptocurrencies can be carried out via approved electronic channels. Besides, the Central Bank plans to implement an Economic and Financial Education Plan aimed at educating the public about the potential risks associated with digital currencies and ways to manage these responsibly.
This policy change was made effective as of June 26 following a collaboration with the Financial Investigations Unit, the Financial System Supervisory Authority, and the central bank. This aligns Bolivia’s crypto regulations with recommendations from the Latin American Financial Action Task Force, therefore making Bolivia another Latin American nation turning to crypto to bolster its struggling economy.
Numerous Latin American countries, grappling with economic woes and inflation, have found cryptocurrency a viable alternative to conventional economic models. Despite recognizing cryptocurrency for transfers and payments, Mexico, like Bolivia, does not consider cryptocurrency as legal forms of tender. On the other hand, El Salvador created a precedent as the first and only country globally to adopt Bitcoin as legal tender in 2021.