Digital currencies will function as legal tender for savings accounts, credit products, and loans.
Bolivia Crypto News
Bolivia is set to integrate cryptocurrencies and stablecoins into its financial system as the government seeks to modernize the country's economy. Economic Minister Jose Gabriel Espinoza announced the plan on Tuesday.
Banks will be allowed to custody crypto on behalf of clients. Digital currencies will function as legal tender for savings accounts, credit products, and loans, Reuters reported. Espinoza said, “You can’t control crypto globally, so you have to recognize it and use it to your advantage.”
Bolivia suffers from high fiat currency inflation, prompting residents to turn to stablecoins as a store of value and medium of exchange. The boliviano averaged above 22% inflation in the 12 months to October, according to Bolivia's National Institute of Statistics.
Businesses in the country have started denominating prices in USDT, a dollar-pegged stablecoin, as an alternative to the local currency. YPFB, Bolivia's state-owned energy company, announced in March it is building a framework to pay for energy imports in crypto.
Vehicle manufacturers, including Toyota, Yamaha, and BYD Company, started accepting USDT as payment in Bolivia in September. The move addresses U.S. dollar shortages affecting international business transactions. U.S. dollars serve as crucial reserve assets for central banks managing monetary exchange-rate regimes.
Stablecoins fill this demand while overcoming local currency controls. Anyone with a cellphone and crypto wallet can purchase and hold dollar-pegged tokens, bypassing centralized infrastructure like traditional banks that enforce strict controls.
High inflation and strict currency controls have bolstered stablecoins as an alternative store of value in Latin America and other emerging economies. The rush by nation-states to integrate cryptocurrencies reflects game theory cited by analysts, who say the fear of missing out is driving nation-state adoption.
The government's decision marks a reversal for Bolivia, which previously maintained restrictive policies toward digital assets. Integration into the financial system provides regulatory clarity for crypto users and businesses operating in the country.
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