Bolivia Lifts 4-Year Ban on Bitcoin, Allowing Crypto Transactions via Banks

Bolivia's Central Bank (BCB) has officially reversed its 2020 ban on Bitcoin and other cryptocurrencies after a four-year hiatus. This move aligns Bolivia with neighboring Argentina's more permissive stance on digital assets, signaling a significant shift in the country's approach to modern financial systems.

End of a Four-Year Ban 

The BCB announced on June 26 that financial institutions can now engage in cryptocurrency transactions via authorized electronic channels. This decision overturns the 2020 prohibition enacted under Board Resolution N°144/2020, in coordination with the Financial System Supervision Authority (ASFI) and the Financial Investigations Unit (UIF). 

The aim is to modernize Bolivia's financial system and acknowledge the growing importance of digital currencies in the global economy.

Despite lifting the ban, the BCB emphasized that cryptocurrencies are not considered "legal tender" in Bolivia. 

The only legal currency remains the "Boliviano." As such, businesses are not obligated to accept cryptocurrencies as payment, and users must bear the associated risks. The BCB plans to include cryptocurrency safety information in its Economic and Financial Education Plan to address these risks.

Bolivia’s Shifting Crypto Regulations 

The lifting of the ban marks a significant change in Bolivia's regulatory stance on cryptocurrencies. In 2014, ASFI prohibited crypto use due to concerns over consumer protection and money laundering.

This ban was tightened in 2022, citing risks of fraud and economic losses. Now, Bolivia joins other Latin American countries with more pro-crypto regulations, allowing banks to transact in cryptocurrencies via approved electronic channels.

The BCB, under its Economic and Financial Education Plan, intends to create an awareness program for the general public. This initiative aims to educate people about the potential risks associated with cryptocurrencies and how to manage them responsibly.