BITCOIN
4 hours ago
No Comments
Menu
In a significant policy shift, the Banco Central de Bolivia has reversed its stance on Bitcoin and other cryptocurrencies, enabling financial institutions to engage with these digital assets. This move is part of an effort to modernize the nation’s payment system.
The central bank’s initiative aims to rejuvenate Bolivia’s economy and ensure its alignment with cryptocurrency regulations prevalent across Latin America.
This development overturns previous restrictions that were first instituted in 2014 and reinforced by Board Resolution N°144/2020 in December 2020, which barred financial institutions from dealing in cryptocurrencies.
The new policy permits banks to handle cryptocurrency transactions through sanctioned electronic means. Nevertheless, the central bank has specified that these digital currencies will not be recognized as official legal tender within the country.
Although banks can facilitate crypto transactions, they are not obligatory for businesses to accept as payment, reflecting the government’s cautious stance on fully integrating cryptocurrencies into the financial system.
In conjunction with this regulatory shift, the Banco Central de Bolivia is set to launch an awareness initiative under its Economic and Financial Education Plan. This program is designed to educate the public about the potential risks and proper management of cryptocurrency investments.
This update in regulations was developed through collaboration between the Financial Investigations Unit, the Financial System Supervisory Authority, and the central bank, taking effect from June 26.
The revision also brings Bolivia’s cryptocurrency policies in line with recommendations from the Latin American Financial Action Task Force, marking Bolivia as the latest country in the region to employ cryptocurrency solutions to bolster its economic landscape.
Across Latin America, numerous nations are grappling with economic downturns and high inflation rates. In response, many are turning to cryptocurrencies like Bitcoin as alternative economic instruments.
El Salvador led the charge as the first and only nation worldwide to declare Bitcoin as legal tender, alongside the US dollar in 2021.
While Mexico doesn’t recognize cryptocurrencies as legal tender, it permits their use for value transfers and financial transactions and imposes taxes on gains from cryptocurrency trades.
Brazil has also embraced the crypto movement, implementing tax regulations in 2023 that impose a 15% tax on crypto earnings to streamline the burgeoning crypto usage within the country.
Similarly, Argentina has recently positioned itself as a crypto-friendly nation with the election of a pro-Bitcoin president, aiming to mitigate severe inflationary pressures, inspired by El Salvador’s precedent.
