Bolivia Remove Bitcoin Ban to Allows Banks to Support Crypto Transactions
The growing popularity of crypto has compelled Bolivia’s authorities to lift the ban on crypto asset. In an official publication, the Banco Central de Bolivia confirmed that banks and financial institutions can accept Bitcoin and crypto transactions.
The decision to remove the crypto ban aimed to modernize the Bolivia payment system.
Bolivia Remove Ban on Bitcoin
Based on crypto’s benefits, Bolivia’s government aims to revive the ailing economy through crypto. According to recent statistics, Bolivia’s inflation rate surged by 3.52% in May.
The sudden increase in inflation demonstrated that the government’s effort to overcome an inflationary environment had been futile. Initially, the Bolivian government enacted several measures, such as subsidizing staple commodities and maintaining fixed exchange rates to hedge inflation.
The slow economic growth in Bolivia encouraged the government to accept Bitcoin payments to cope with other Latin American countries. The crypto ban was introduced in 2014 to protect the Bolivian residents from the risk associated with uncontrolled assets.
The Bolivian government restricted the issuance of assets not regulated by the central power to shield the citizens from financial losses. Afterward, the Bolivian authorities extended the ban on crypto to banks and financial institutions under the Board Resolution “N°144/2020.”
Despite the crypto ban, Bolivia joined the Latin American Financial Action Task Force (LAFATF) to strengthen its relations with neighboring countries. The LAFATF members aim to embrace collaborative approaches to stimulate economic growth.
Bolivia Ease Ban on Bitcoin
In particular, the LAFATF focused on exploring new opportunities to hedge the biting inflation in LATAM. With the changes in the financial landscape, crypto and Bitcoin have emerged as practical tools to foster economic development.
To cope with other LAFATF member states, the Bolivian government was forced to lift the ban on crypto assets. While Latin America boasts thriving manufacturing, agriculture, mining, and service industries, the Bolivia government has embraced innovative economic solutions to bring prosperity.
A reflection of the June 26 announcement demonstrates that the central Bank of Bolivia co-authored the new rule in collaboration with the Financial Investigation Unit (FIU) and the Financial System Supervisory Authority (FSSA).
The financial regulators team up to develop regulation of crypto assets that align with the mission of LAFATF. Guided by Bolivia’s rule-making process, the regulators outlined that the new legislation would allow banks to support crypto transactions using regulated electronic payment methods.
LATAM Support Crypto Adoption
The financial regulators explained that removing the ban on crypto assets does not recognize digital assets as legal tender. This implies that local companies will not be allowed to accept crypto payments.
Citing a recent study, the central bank noted that it was essential to introduce financial education to the citizens to equip them with the fundamental skills and knowledge of crypto assets.
Launching an education program will empower Bolivia residents to make informed financial decisions and create awareness of advanced financial products like cryptocurrency.
With the new legislation, the Bolivian authority seeks to improve the attractiveness of its crypto industry. El Salvador has emerged as the most suitable location for fintech and crypto firms in Latam.
The Bolivian authority is silently amending the crypto rules to attract foreign investment to the region by replicating the El Salvador pro-crypto move.
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