Bolivia lifts ban on cryptocurrency transactions

The Central Bank of Bolivia (BCB) announced a significant regulatory change, lifting the ban on crypto transactions that had been in effect since December 2020 under Governing Council Resolution No. 144/2020.

This one stroke brings Bolivia in line with regional trends, as neighboring Argentina as well adopted a more favorable position with respect to digital assets.

The updated regulations now allow banks to conduct cryptocurrency transactions through authorized electronic channels. However, the BCB clarified that cryptocurrencies are not recognized as legal tender. This means that while digital assets can be used for transactions, they do not have official currency status and businesses are not required to accept them as payment.

This regulatory update is the result of a joint effort involving the BCB, the Financial Supervisory Authority (ASFI) and the Financial Investigations Unit (UIF). It is also in line with the recommendations of the Latin American Financial Action Task Force (GAFILAT), which called on Bolivia to address the challenges posed by the digital financial environment.

Despite the acceptance of Bitcoin and other cryptocurrencies , BCB remains cautious. She plans to include information about the risks associated with crypto trading in her economic and financial education plan. This initiative aims to inform the public about the safe management of digital assets, emphasizing the importance of being aware of potential risks.

The lifting of Bolivia's cryptocurrency ban marks the end of strict regulations that began in 2014 when the Financial System Supervisory Authority banned the use of cryptocurrencies due to concerns about consumer protection and money laundering. In 2022, the bank further restricted the financial sector from operating with cryptocurrencies to prevent risks, fraud and economic losses.

With this change, Bolivia joins a growing list of countries adapting to the evolving landscape of digital finance and cross-border money exchange. This change reflects a broader trend of regulatory adaptation in response to the growing role of cryptocurrencies in the global financial system.