Bolivia reverses Bitcoin ban, allows banks to conduct crypto transactions
Bolivia’s central bank has decided to lift a ban on payments using Bitcoin and other cryptocurrencies that was imposed in 2014. The country is seeking to rebalance its economy while modernizing its payment systems. Bolivia is the latest Latin American country to take a pro-crypto stance, even though 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 issued on Wednesday, Banco Central de Bolilvia announced that it would lift its ban on cryptocurrency payments in the country, including Bitcoin transactions. The decision was made in collaboration with the Financial System Supervisory Authority (Autoridad de Supervisión del Sistema Financiero) and the Financial Investigation Unit (Unidad de Investigaciones Financieras).
According to StatisticsBolivia’s public debt is expected to increase by $21.2 billion (approximately Rs 1,767.46 crore) between 2024 and 2029.
The Bolivian bank has decided to allow banks to use approved electronic channels and facilitate crypto payments. While Bolivia’s central bank has not yet recognized Bitcoin or other cryptocurrencies as legal tender, allowing these transactions could bring in more money for the country, as cross-border crypto transactions are instant and usually free.
In addition, Bolivia has taken steps to reduce its dependence on the US dollar, especially after the successive interest rate hikes announced by the US Fed in recent months to address the economic downturn following the pandemic. In July 2023, Bolivia Reportedly challenged the dominance of the US dollar by targeting the Chinese yuan and the Russian ruble.
Other Latin American countries are doubling down on crypto
El Salvador became the first country in the world to legalize Bitcoin as a legitimate currency in September 2021. Salvadoran President Nayib Bukele continues to push to transform the country into a fully pro-BTC region, with crypto-related businesses eager to set up shop. Brazil is another country that has taken pro-crypto steps in recent years.
