As an analyst with a background in finance and experience in the Latin American market, I’m thrilled to see Bolivia taking steps towards embracing cryptocurrencies and digital assets. The revocation of the crypto ban is a significant move that could lead to broader adoption in the region.
The use of cryptocurrencies and digital assets is becoming increasingly popular in Latin America as more nations make the shift. Notably, Bolivia has recently decided to lift its four-year ban on cryptocurrencies in order to “update their payment system.”
Bolivia About To Revolutionize Its Payment System
Effective June 26, the Central Bank of Bolivia (BCB) announced the reversal of its earlier decision that restricted the usage of cryptocurrencies within the country. The Board Resolution No. 144/2020, passed on December 15, 2020, had forbidden the utilization of “channels and Electronic Payment Instruments (IEPs)” for buying and selling transactions involving Virtual Assets.
The latest Board Resolution No. 082/2024 enables financial institutions in collaborating with the Financial System Supervisory Authority (ASFI) and the Financial Investigations Unit (UIF), to process crypto transactions. This decision was influenced by the assessment report of the Plurinational State of Bolivia 2023-2024, conducted by the Latin American Financial Action Task Force (GAFILAT).
Following the assessment, GAFILAT proposed that the Bolivian authorities think about regulating Virtual Asset Service Providers (VASPs) based on the specific public policy to be determined in Bolivia.
Last year, the country has been working legally to address upcoming challenges in the modernization of its payment system and integrate cryptocurrencies and relevant regulations.
Edwin Rojas Ulo, president of the Central Bank of Bolivia, highlighted the bank’s ongoing efforts to upgrade Bolivia’s payment system and related infrastructure. According to Rojas Ulo, the recent Board Resolution introduces a fresh method for Bolivians to conduct financial transactions.
The BCB, in accordance with its guidelines, has persistently advanced the modernization of the country’s payment system and constructed payment infrastructure. Through these efforts, it has made it feasible for the implementation of technological advancements and new payment methods. Currently, the BCB stands out as a leading figure in the region for its achievements in connectivity, interoperability, and digital financial inclusion. It encourages the involvement of both banking and non-banking institutions, thereby fostering the expansion of financial services to all sectors of society. In line with this approach, Resolution No. 084/2024 from the BCB’s Board will offer an additional tool that will fortify economic and commercial transactions.
A Step Toward Broader Crypto Adoption
As a researcher studying financial regulations, I can tell you that according to the recent press release, ASFI intends to take charge of Financial Intermediation Entities (EIFs). Specifically, these entities will come under ASFI’s purview when it comes to providing means for acquiring crypto assets. Moreover, ASFI plans to provide financial education to the general public regarding virtual assets and the inherent risks associated with them.
The International Union of Foodworkers (IUF) will monitor and take action against potentially suspicious activities related to the generation of illegal profits and funding of terrorism through virtual assets. They will implement necessary regulatory changes to prohibit such transactions involving criminal activities.
As an analyst, I would put it this way: The Bolivian Central Bank (BCB) insists that the Boliviano is the sole legal tender in Bolivia. Contrary to El Salvador’s move, Bitcoin and other cryptocurrencies do not share this status. Instead, they are considered non-cash instruments, and there is no mandate for the population to accept them as a means of payment.
In the end, the Central Bank will integrate the ideas behind crypto assets and the potential risks involved in their use into its Economic and Financial Education Program. The goal is to enhance the public’s understanding of these digital assets and empower Bolivians to make wise choices when dealing with them.
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2024-06-28 23:42