Key Points
- Bolivia has lifted its long-standing ban on Bitcoin, allowing banks to handle crypto-related transactions.
- The nation’s central bank believes this move will stimulate economic innovations and align Bolivia with other Latin American countries.
Bolivia, a Latin American country, has ended its ten-year prohibition on Bitcoin (BTC).
This move permits banks to carry out transactions related to cryptocurrencies, as part of the country’s push to modernize its payment systems.
Reversing the Crypto Ban
The Banco Central de Bolivia, Bolivia’s central bank, announced that it has overturned its decision on digital asset transactions. This decision allows banks to delve into the industry.
The central bank is optimistic that ending the crypto ban will spur innovations, potentially giving a boost to Bolivia’s struggling economy.
Furthermore, the Banco Central de Bolivia expressed its intention to bring the country’s crypto regulations in line with other Latin American nations.
The prohibition on digital assets began in 2014, with Bolivia preventing its population of over 12 million people from engaging with the sector, citing the absence of a clear regulatory framework and potential illicit uses.
In December 2020, six years after the initial ban, the government prohibited financial entities from processing crypto transactions. This ban was enforced under the nation’s Board Resolution N°144/2020.
However, thanks to the country’s new law, Bolivia has embraced crypto after a decade of sidelining it. Yet, the new regulation only permits banks to conduct crypto transactions through state-approved channels.
New Legislative Framework and Crypto in Latin America
The creation of the crypto law was a collaborative effort by three government bodies in Bolivia. The country’s Financial Investigations Unit, the Financial System Supervisory Authority, and the central bank partnered to create the new legislation.
The law, which went into effect on June 26, aligns Bolivia’s crypto regulations with regional standards endorsed by the Latin American Financial Action Task Force.
Bolivia is planning to launch an educational campaign to boost crypto awareness in the region. This initiative will be introduced under the country’s Economic and Financial Education Plan.
In the meantime, Bolivia’s recent acceptance of Bitcoin has positioned the country as the latest Latin American nation to leverage crypto to bolster its weak economy.
Countries like El Salvador, Mexico, Argentina, and Brazil in the region are also crypto-friendly. El Salvador was the first country globally to officially accept crypto and recognize Bitcoin’s potential as a payment method.
In 2022, El Salvador declared Bitcoin a legal tender, enabling the crypto asset to be used alongside its fiat currency for everyday activities.
While cryptocurrencies are not yet recognized as a valid currency in Brazil, they are accepted for value transfers and payments. Argentina also recently elected a pro-crypto president, Javier Milei, though his administration’s impact on the crypto economy remains to be seen.
