The Central Bank of Bolivia (BCB) has taken a historic step by issuing Resolution N°082/2024, which formally annuls the previous Resolution N°144/2020 that prohibited financial institutions from engaging in any cryptocurrency-related activities. This marks a complete reversal of the country’s blanket ban on bitcoin and other digital assets, opening the door for banks, payment processors, and crypto service providers (VASPs) to operate within the national financial system.
A Historic Reversal
Edwin Rojas Ulo, president of the BCB, stated that the new resolution provides the population with an additional mechanism that will strengthen financial and commercial activities. The old ban, enacted in December 2020, effectively blocked bitcoin and crypto from entering Bolivia's formal economy. At that time, the central bank cautioned citizens to avoid using, marketing, or negotiating these assets due to anonymity risks, lack of guarantees in case of fraud, and no investor protection.
Background: Resolution 144/2020
The 2020 resolution was part of a broader trend in Latin America where several countries, including Bolivia, took a cautious or hostile stance toward cryptocurrencies. Bolivia’s outright prohibition was one of the strictest in the region. However, the evolving global regulatory landscape and recommendations from international bodies pushed the country to reconsider. The Financial Action Task Force of Latin America (GAFILAT) reviewed Bolivia’s anti-money laundering framework and advised the country to consider regulating Virtual Asset Service Providers in line with its public policy context. This external pressure, combined with growing local interest in digital assets, eventually led to the policy shift.
What the New Resolution Means
Under Resolution N°082/2024, financial institutions are now permitted to intermediate payments for the acquisition or sale of cryptocurrencies. This includes facilitating transactions for exchanges, enabling crypto-related bank transfers, and allowing custody services. However, the BCB reiterated that the boliviano (BOB) remains the only legal tender in the country, and cryptocurrencies are not recognized as legal tender or cash. This clarification ensures that while crypto can be used for payments and investments, it does not have the same status as the national currency. Users must bear the inherent risks, including price volatility, cybersecurity threats, and potential fraud.
Regulatory Alignment with FATF
Bolivia’s move aligns with the global trend of incorporating FATF recommendations into domestic laws. By bringing VASPs under regulatory oversight, the country aims to combat money laundering and terrorist financing while fostering innovation. The new resolution does not provide detailed licensing or reporting requirements yet, but it signals that comprehensive crypto regulations are in development. The central bank indicated that further guidance will be issued to ensure compliance with international standards.
Risks and Clarifications
The BCB made clear that the lifting of the ban does not mean Bolivia endorses bitcoin as a safe or stable asset. The institution warned citizens to be careful when using cryptocurrencies due to their volatile nature and the absence of a central authority backing them. Financial entities are expected to implement robust KYC and AML procedures for any crypto-related service and report transactions to the central bank as required.
Latin American Context
Bolivia joins a growing list of Latin American nations that have moved toward embracing digital assets. El Salvador famously adopted bitcoin as legal tender in 2021, while Brazil and Argentina have introduced progressive crypto regulations. Peru and Colombia are also exploring central bank digital currencies (CBDCs) and regulatory sandboxes. Bolivia’s decision could boost regional economic integration, especially for remittances and cross-border trade. However, given the country’s history of inflation and dollar shortages, the practical utility of cryptocurrencies may face unique challenges. Nonetheless, the policy shift is expected to attract fintech investment and provide new opportunities for unbanked populations.
This article is based on official announcements from the Central Bank of Bolivia and publicly available reports as of June 28, 2024.