By
Godfrey Benjamin
June 28th, 2024
In addition to withdrawing the ban, Bolivia wants to launch an educational campaign to increase crypto awareness in the region.
Latin American country Bolivia has lifted its decade-long ban on Bitcoin (BTC), allowing banks to process crypto-related transactions as part of efforts to modernize its payment systems.
In a recent announcement, the nation’s central bank, the Banco Central de Bolivia said it has reversed its decision on digital asset transactions and banks are now free to explore the industry.
Unlocking Economic Innovations
The central bank believes that lifting the crypto ban will catalyze innovations, potentially revitalizing Bolivia’s struggling economy.
Additionally, the Banco Central de Bolivia said it aimed to align the country’s crypto regulations with other Latin American nations. The ban on digital assets took effect in 2014 when Bolivia stopped its population of 12.22 million people from interacting with the space citing concerns related to lack of clear regulatory framework and potential use for illegal activities.
Six years later in December 2020, the government barred financial entities from processing crypto transactions. The ban was imposed under the nation’s Board Resolution N°144/2020. Thanks to the country’s new law, Bolivia has opened up to crypto after sitting on the sideline for ten years. However, the new regulation only allows banks to conduct crypto transactions through state-approved channels.
The central bank warned that companies are not to accept digital assets for payments of goods and services as the asset class has not been approved for such transactions. The nation’s government clarified that the law does not recognize cryptocurrencies such as Bitcoin as legal tender in Bolivia yet.
New Legislative Framework
The introduction of the crypto law was a combined effort of three governmental bodies in the country. According to the announcement, the new legislation was created in partnership with the country’s Financial Investigations Unit, the Financial System Supervisory Authority, and the central bank.
The law became effective on June 26 and it harmonizes Bolivia’s crypto regulations with regional standards endorsed by the Latin American Financial Action Task Force.
In addition to withdrawing the ban, Bolivia wants to launch an educational campaign to increase crypto awareness in the region. This planned initiative will be introduced under the country’s Economic and Financial Education Plan. Through this program, Bolivians will learn about the possible risks associated with cryptocurrencies and how to deal with the risks responsibly.
Latin American Countries and Crypto
Meanwhile, Bolivia’s recent acceptance of Bitcoin has made the country the latest nation in Latin America to embrace crypto to help resuscitate its weak economy.
The region is known for its openness to financial innovation as exemplified by El Salvador. The nation was the first country in the world to officially adopt crypto and recognize Bitcoin’s potential as a payment method.
In 2022, El Salvador announced that it had made Bitcoin a legal tender, allowing the crypto asset to be used alongside its fiat currency for everyday activities.
Other countries in the region such as Mexico, Argentina, and Brazil are also crypto-friendly. Although, in Brazil, cryptocurrencies are yet to be recognized as a valid currency, however, they are accepted for value transfers and payments.
On the other hand, Argentina has also recently elected a pro-crypto president Javier Milei who was sworn into office last year. However, it is yet to be seen what his administration will do for the crypto economy.