The Bolivia Central Bank has lifted its ban on cryptocurrencies after four years, allowing financial institutions to engage in digital asset transactions. This move aligns with neighboring Argentina more permissive stance on cryptocurrencies. The reversal of the ban, which was enacted in2020, is a coordinated effort between the Central Bank of Bolivia (BCB), the Financial System Supervision AuthorityASFI), and the Financial Investigations Unit (UIF). However, it is important to note that despite this regulatory freedom, cryptocurrencies are not considered legal tender in Bolivia. The official currency of country remains the Boliviano.
To address the risks associated with cryptocurrencies, the B plans to include information on cryptocurrency safety in its Economic and Financial Education Plan. This change in regulations indicates a shift in Bolivia’s stance on digital assets from a previously strict position. In 2014, crypto use was prohibited by ASFI due to concerns over consumer protection and money laundering. The ban was tightened in 2022 due to risks of fraud and economic losses.
Despite these regulatory changes, businesses are not to accept cryptocurrencies as payment and users must bear any associated risks. Interestingly, Bitcoin’s price experienced a minor increase of around 1.5%, $62,333 from $60,580 at the time of writing.
Overall, Bolivia’s new regulations signify a significant shift in financial policy by opening up new opportunities for digital asset transactions while maintaining caution regarding their legal status and potential risks.