In addition to lifting the ban, Bolivia is looking to launch an education campaign to raise awareness of cryptocurrencies in the region.
The Latin American country of Bolivia has lifted its 10-year ban on Bitcoin (BTC), allowing banks to process cryptocurrency-related transactions. This is part of our efforts to modernize our payment system.
According to a recent announcement, the Central Bank of Bolivia has reversed its decision on digital asset trading, saying banks are now free to explore the industry.
Realizing economic innovation
The central bank believes lifting the cryptocurrency ban would spur innovation and help revitalize Bolivia’s struggling economy.
The Banco Central de Bolivia also said it aims to bring the country’s cryptocurrency regulations in line with other Latin American countries. The digital asset ban came into effect in 2014, when Bolivia’s population of 12.22 million stopped interacting with the space, citing concerns about the lack of a clear regulatory framework and its potential use for illicit activities.
Six years later, in December 2020, the government banned financial institutions from processing cryptocurrency transactions. The ban was imposed by the Council of State Resolution N°144/2020. Thanks to the country’s new law, Bolivia opened its doors to cryptocurrencies after a decade of neglect. However, the new regulation only allows banks to process cryptocurrency transactions through state-approved channels.
The central bank warned businesses not to accept digital assets for payment of goods and services because the asset class is not approved for such transactions. The government said cryptocurrencies such as Bitcoin are not yet recognized as legal tender in Bolivia.
New legislative framework
The introduction of the cryptocurrency law was a joint effort by three government agencies in the country. According to the announcement, the new law was created in collaboration with the country’s Financial Investigation Department, the Financial System Supervisory Authority, and the Central Bank.
The law went into effect on June 26 and harmonizes Bolivia’s cryptocurrency regulations with regional standards approved by the Latin American Financial Action Task Force.
In addition to lifting the ban, Bolivia also wants to launch an educational campaign to raise awareness of cryptocurrencies 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 potential risks associated with cryptocurrencies and how to handle them responsibly.
Latin American Countries and Cryptocurrencies
Meanwhile, Bolivia recently embraced Bitcoin, becoming the latest Latin American country to embrace cryptocurrencies to revive its fragile economy.
The region is known for its openness to financial innovation, as is El Salvador. South Korea was the first country in the world to officially adopt cryptocurrency and recognize the potential of Bitcoin as a means of payment.
In 2022, El Salvador announced that it was making Bitcoin its legal tender, allowing crypto assets to be used alongside fiat money for everyday activities.
Other countries in the region, such as Mexico, Argentina, and Brazil, are also cryptocurrency-friendly. Although cryptocurrencies are not yet recognized as valid currencies in Brazil, they are accepted for value transfers and payments.
Argentina, on the other hand, also recently elected a pro-crypto president, Javier Millei, who took office last year. However, it is still unclear what his administration will do for the crypto economy.
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