Bolivia Central Bank Lifts Cryptocurrency Ban

In a groundbreaking move, the Central Bank of Bolivia has lifted its four-year ban on cryptocurrency, marking a significant shift in the country’s financial landscape.

Announced on June 26, 2024, this decision allows local financial institutions to engage in cryptocurrency transactions, with the aim of modernizing the payment system.

Discover how Bolivia is embracing the future of finance while safeguarding its financial system.

Lifting a Four-Year Cryptocurrency Ban

On June 26, 2024, the Central Bank of Bolivia (BCB) announced the lifting of a cryptocurrency (crypto asset) ban that had been in place for approximately four years. This significant move was revealed in an official statement:

“The Central Bank of Bolivia, through Board Decision No. 082/2024 dated June 25, 2024, has repealed Board Decision No. 144/2020 dated December 15, 2020, and has approved the use of electronic payment instruments (IEP) for cryptocurrency transactions.”

This decision was made in collaboration with the Bolivian Financial System Supervisory Authority (ASFI) and the Financial Investigation Unit (UIF), taking into account the evaluation by the Latin American Financial Action Task Force (GAFILAT) on anti-money laundering measures.

The report indicates that regulations for cryptocurrency service providers will also be considered.

As a result, local financial institutions will now be able to engage in cryptocurrency transactions, with the hope that this will modernize the payment system.

Modernization Through Regulation, Supervision, and Education

The interim president of the Central Bank of Bolivia highlighted that BCB, as part of its policy, continues to promote the modernization of the payment system and the development of payment infrastructure.

This effort aims to establish the region as a leader in terms of interoperability, interconnectivity, and digital financial inclusion, encouraging equal participation from both banks and non-bank entities to democratize financial services.

With the lifting of the cryptocurrency ban, the ASFI will supervise financial intermediaries, ensuring that educational activities are conducted to deepen public understanding of crypto assets.

The UIF will implement preventive measures to identify suspicious transactions that may be linked to illegal activities, and regulatory adjustments will be made to prevent the use of cryptocurrencies for money laundering or by criminal organizations.

However, the BCB emphasized that the official currency remains the Boliviano, and cryptocurrencies are not considered legal tender. Citizens are not obligated to accept cryptocurrencies as a form of payment.

Thus, while the risks associated with using and trading cryptocurrencies fall on the users, it is anticipated that the combination of regulation, supervision, and education will drive modernization through the adoption of cryptocurrencies.