Bolivia Reverses Bitcoin Ban, Legalises Crypto Transactions for Banks

Bolivia's central bank has yet to recognise Bitcoin or other cryptocurrencies as legal tender.

Written by Radhika Parashar, Edited by David Delima | Updated: 28 June 2024 19:15 IST

Bolivia Reverses Bitcoin Ban, Legalises Crypto Transactions for Banks

Photo Credit: Unsplash/ Kanchanara

Bolivia banned even banks from dabbling in crypto four years ago in the year of 2020

Highlights

Bolivia relied on gas exports around the year 2000 before reserves deplet
The country banned crypto transactions in 2014
Bolivia is looking to reduce its reliance on the US dollar

The central bank of Bolivia has decided to lift a ban on payments using Bitcoin and other cryptocurrencies imposed in 2014. The country is aiming to balance its economy, while modernising its payment systems. Bolivia has become the latest Latin American country to take a pro-crypto stance, even though Bitcoin or other cryptocurrencies are yet to be recognised as legal tender in the region. The central bank will also allow banks to make crypto transactions — a restriction that was implemented in 2020.

Bolivia's new stance on cryptocurrency and crypto transactions

In a statement issued on Wednesday, the Banco Central de Bolilvia announced that it was reversing 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 Statista, the national debt in Bolivia is projected to increase by $21.2 billion (roughly Rs. 1,76,746 crore) between 2024 and 2029 .

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The Bolivian bank has decided to let banks use approved electronic channels and facilitate crypto payments. While Bolivia's central bank has yet to recognise Bitcoin or other cryptocurrencies as legal tender, allowing these transactions could fetch the country more in remittances since cross border crypto transactions are instant and typically free of charge.

In addition, Bolivia has been taking steps to reduce its reliance on the US dollar, especially after back-to-back interest rate hikes in recent months announced by the US Fed to cope with the post-pandemic economic slump. In July 2023, Bolivia reportedly challenged the dominance of the US dollar by turning focus to the Chinese yuan and the Russian ruble.

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Other countries in Latin America doubling down on crypto

El Salvador became the first in the world to legalise Bitcoin as a legitimate currency back in September 2021. Salvadoran president Nayib Bukele is continuing efforts to convert the country into a completely pro-BTC region, rife for crypto-related businesses to set up shops in. Brazil is another country that has taken pro-crypto steps in recent years.

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Further reading: Cryptocurrency, Bolivia, Bitcoin, Crypto Ban

Radhika Parashar

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Radhika Parashar is a senior correspondent for Gadgets 360. She has been reporting on tech and telecom for the last three years now and will be focussing on writing about all things crypto. Besides this, she is a major sitcom nerd and often replies in Chandler Bing and Michael Scott references. For tips or queries you could reach out to her at RadhikaP@ndtv.com. More