Bolivia has lifted its ban on cryptocurrencies. The move comes a decade after Bolivia’s central bank, Banco Central de Bolivia, outlawed virtual currencies in the nation.
According to a recent announcement, the central bank will now allow financial institutions in the nation to conduct transactions involving cryptocurrency assets.
These transactions were previously prohibited under the Board Resolution N°144/2020.
Crypto to counter inflation
The move comes as the nation’s economy has been struggling over the past years. With cryptocurrencies, the central bank aims to modernise the nation’s digital payments system.
However, transactions will only be allowed via verified payment channels.
Further, the central bank has stressed that the recent greenlight doesn’t quantify cryptocurrencies and related virtual assets as a form of legal tender.
This means companies cannot accept cryptocurrencies as payments despite the assets being tradable via banks.
The recent change was the result of a collaboration between the Financial Investigations Unit, the Financial System Supervisory Authority and the central bank. The regulation came into effect on June 26.
Further, the regulations are in line with suggestions made by the Latin American Financial Action Task Force.
Banco Central de Bolivia also plans to create an awareness program under its Economic and Financial Education Plan. The initiative will focus on educating the general public about the risks associated with cryptocurrencies and how to manage them.
Latin America loves crypto
Back in 2021, El Salvador became the first Latin American nation in the world to adopt Bitcoin as legal tender. Since then, other nations in the region have looking at cryptocurrencies as an alternative economic solution.
Brazil, for instance, has also been quite active when it comes to adopting cryptocurrencies. The nation’s central bank started taxing crypto profits in 2023. Banking giants like Santander have also announced their intentions to offer cryptocurrency trading services in the nation.
Meanwhile, Mexico also allows cryptocurrencies to be used as a means of payment. That’s on top of taxiing cryptocurrency profits from trades.
The same can be said about Argentina, where the residents have backed a pro-Bitcoin president, Javier Milei. The president views cryptocurrencies as a tool against the triple-digit rates of inflation the country has witnessed.
Earlier this year, blockchain analytics firm Chainalysis reported that Argentina leads Latin America in raw crypto transaction volume.
In the same report, Chanalysis also noted that Latin America accounted for 7.3% of the crypto market globally. Over 50% of people in the region had been utilising cryptocurrencies in day-to-day activities between mid-2022 and 2023.
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