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Bolivia

Retail_Trading_Status

Allowed-Regulated Unknown
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Analysis ID
#13
Version
Archived
Created
2025-04-12 06:37
Workflow Stage
Live

Executive Summary

Bolivia, after initially banning cryptocurrencies, now permits regulated trading. The Central Bank of Bolivia (BCB) lifted the ban in June 2024, allowing crypto transactions through authorized channels. The BCB, ASFI, and UIF are collaborating on oversight, including AML/CFT measures. Cryptocurrencies are not legal tender, but financial institutions are starting to offer crypto services under specific regulations.

Key Pillars

The primary regulator is the Central Bank of Bolivia (BCB), along with ASFI and UIF. Key compliance requirements include AML/CFT measures. Licensing or registration requirements for Virtual Asset Service Providers (VASPs) are anticipated as the regulatory framework develops. The BCB, ASFI, and UIF are responsible for ensuring financial security, preventing illicit transactions and educating the public on the risks of crypto investments.

Landmark Laws

  • Board Resolution No. 144/2020 (December 2020): Prohibited financial institutions supervised by ASFI from engaging in any transactions involving crypto assets.
  • Board Resolution No. 082/2024 (June 2024): Lifted the ban on the use, marketing, and trading of crypto assets in Bolivia, repealing Resolution 144/2020.

Considerations

Cryptocurrencies are not considered legal tender in Bolivia. Risks include illicit transactions, financial security, and consumer protection. Tax treatment is not explicitly mentioned, but it's likely to be addressed in future regulations. There has been a reported surge in crypto trading volume, primarily driven by stablecoins and individual interest.

Notes

The initial ban was implemented in 2014 and reinforced in December 2020. The ban was lifted in June 2024. Economic factors like the shortage of US dollars influenced the policy reversal. State-owned entities like YPFB are exploring crypto for international trade. As of March 2025, the country has moved toward a structured regulatory framework. Sources include legal analysis, financial news outlets (Cointelegraph, Binance News), crypto data aggregators (CoinMarketCap), and primary sources (BCB, ASFI).

Detailed Explanation

Bolivia's approach to cryptocurrency trading has significantly evolved. Initially, the country had a strict ban, one of the few in Latin America. This ban was formalized by the Central Bank of Bolivia (Banco Central de Bolivia - BCB) through Board Resolution No. 144/2020, issued in December 2020. This resolution prohibited financial institutions under the supervision of the Financial System Supervisory Authority (Autoridad de Supervisión del Sistema Financiero - ASFI) from engaging in crypto asset transactions. Concerns driving this ban included consumer protection, financial stability, potential for illicit activities (money laundering), and the lack of sovereign backing for cryptocurrencies. However, this ban was lifted in June 2024 through Board Resolution No. 082/2024. This resolution repealed Resolution 144/2020 and allows the use, marketing, and trading of crypto assets through authorized electronic payment channels. This shift aligns Bolivia with regional trends. The reversal was influenced by factors like global crypto adoption, economic pressures (US dollar shortage), the need for financial innovation, and recommendations from the Financial Action Task Force of Latin America (GAFILAT) regarding Virtual Asset Service Providers (VASPs). Cryptocurrencies are not legal tender in Bolivia, meaning businesses aren't obligated to accept them. The regulatory framework is still developing, with the BCB, ASFI, and the Financial Investigations Unit (Unidad de Investigaciones Financieras - UIF) collaborating on oversight. Their responsibilities include financial security, preventing illicit transactions (AML/CFT), and public education on crypto risks. Following the ban lift, there has been a surge in crypto trading volume, driven by stablecoins and individual interest. Financial institutions like Banco Bisa have begun offering services like USDT custody, operating within the emerging framework overseen by ASFI. The state-owned energy company YPFB is also exploring crypto use for international trade. Individual citizens and residents are now legally permitted to buy, sell, and hold cryptocurrencies, but within a regulated environment managed by the central bank and financial supervisors. Platforms and financial institutions are expected to operate under existing or forthcoming regulations, likely including KYC/AML requirements. In March 2025 the country has moved toward a structured regulatory framework, but cryptocurrencies are not legal tender.

Summary Points

Here's a bullet-point summary of the retail cryptocurrency trading status in Bolivia, designed for quick comprehension:

Retail Cryptocurrency Trading Status in Bolivia (March 2025)

I. Regulatory Status:

  • Allowed-Regulated: Individual citizens and residents are legally permitted to buy, sell, and hold cryptocurrencies.
  • Not Legal Tender: Cryptocurrencies are not considered legal tender; businesses are not obligated to accept them.

II. Key Regulatory Bodies & Roles:

  • Central Bank of Bolivia (Banco Central de Bolivia - BCB):
    • Overall regulatory oversight.
    • Issues resolutions regarding cryptocurrency use.
    • Lifted the previous ban on cryptocurrencies in June 2024.
  • Financial System Supervisory Authority (Autoridad de Supervisión del Sistema Financiero - ASFI):
    • Supervises financial institutions involved in crypto transactions.
    • Ensures compliance with regulations.
  • Financial Investigations Unit (Unidad de Investigaciones Financieras - UIF):
    • Focuses on preventing illicit transactions (AML/CFT).
  • Collaborative Responsibilities (BCB, ASFI, UIF):
    • Ensuring financial security.
    • Preventing illicit transactions (AML/CFT measures).
    • Educating the public about crypto investment risks.

III. Important Legislation & Regulations:

  • Board Resolution No. 144/2020 (December 2020):
    • Previously prohibited financial institutions from engaging in crypto transactions.
  • Board Resolution No. 082/2024 (June 2024):
    • Repealed Resolution 144/2020, lifting the ban on cryptocurrency use, marketing, and trading.
    • Permits crypto transactions through authorized electronic payment channels (EPI).
  • Forthcoming/Existing Regulations:
    • Expected to include KYC/AML requirements for platforms and financial institutions.

IV. Requirements for Compliance:

  • KYC/AML Compliance: Platforms and financial institutions must adhere to Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations.
  • Operation Through Authorized Channels: Crypto transactions must occur through regulated electronic payment channels.
  • Financial Security Measures: Implement measures to ensure the security of crypto assets and transactions.
  • Reporting Requirements: Likely to be imposed on VASPs and financial institutions.

V. Notable Restrictions or Limitations:

  • Not Legal Tender: Cryptocurrencies are not legal tender.
  • Developing Regulatory Framework: The regulatory environment is still evolving, so compliance requirements may change.
  • Risk Awareness: Public education emphasizes the risks associated with crypto investments.

VI. Recent Developments or Changes:

  • June 2024: Ban Lifted: The Central Bank of Bolivia lifted the ban on cryptocurrency trading.
  • Increased Trading Volume: Significant surge in crypto trading volume post-legalization, particularly in stablecoins.
  • Financial Institution Involvement: Some financial institutions (e.g., Banco Bisa) are offering crypto-related services (e.g., USDT custody) within the regulatory framework.
  • State-Owned Entity Exploration: YPFB (energy company) is exploring crypto use for international trade.

Full Analysis Report

Okay, here is the detailed report on the retail cryptocurrency trading status in Bolivia, acting as a specialized financial regulatory analyst.

Report: Retail Cryptocurrency Trading Status in Bolivia

Topic: Retail_Trading_Status
Description: Assess whether individual citizens and residents in the country are legally permitted to buy, sell, and hold cryptocurrencies. Detail the regulatory environment surrounding this activity (e.g., KYC/AML requirements imposed on platforms, general warnings issued).

1. Current Status: Allowed-Regulated

2. Detailed Narrative Explanation:

Bolivia's stance on cryptocurrency trading has undergone a significant transformation. Initially, Bolivia was one of the few countries in Latin America with an outright ban on the use, commercialization, and negotiation of cryptocurrencies. This ban was first established in 2014 and reinforced by the Central Bank of Bolivia (Banco Central de Bolivia - BCB) through Board Resolution No. 144/2020, issued in December 2020. This resolution explicitly prohibited financial institutions supervised by the Financial System Supervisory Authority (Autoridad de Supervisión del Sistema Financiero - ASFI) from engaging in any transactions involving crypto assets. The primary reasons cited for the ban were concerns over consumer protection, financial stability, the potential use of crypto for illicit activities like money laundering, and the lack of backing by a sovereign state.

However, in a major policy reversal, the Central Bank of Bolivia lifted this ban in June 2024 through Board Resolution No. 082/2024. This new resolution repealed the previous prohibitions (including Resolution 144/2020) and permits the use, marketing, and trading of crypto assets in Bolivia. This shift allows individuals and entities, including financial institutions, to engage with cryptocurrencies through authorized electronic payment channels.

This change aligns Bolivia more closely with regional trends in Latin America, where many countries are exploring or implementing regulatory frameworks for digital assets. The decision was influenced by factors such as the growing global adoption of cryptocurrencies, economic pressures including a shortage of US dollars, the need for financial innovation, and recommendations from bodies like the Financial Action Task Force of Latin America (GAFILAT) regarding the regulation of Virtual Asset Service Providers (VASPs).

While trading is now permitted and regulated, it is crucial to note that cryptocurrencies are not considered legal tender in Bolivia. This means businesses are not obligated to accept them as payment. The regulatory framework is still developing, with the BCB, ASFI, and the Financial Investigations Unit (Unidad de Investigaciones Financieras - UIF) collaborating on oversight. Their responsibilities include ensuring financial security, preventing illicit transactions (AML/CFT measures are expected), and educating the public about the risks associated with crypto investments.

Since the ban was lifted, there has been a reported surge in crypto trading volume, primarily driven by stablecoins and individual interest. Some financial institutions, like Banco Bisa, have started offering services such as USDT custody, operating within the emerging regulatory framework overseen by ASFI. This indicates a move towards integrating crypto services into the formal financial system under specific rules. State-owned entities, like the energy company YPFB, are also exploring the use of crypto for international trade, further signaling official acceptance and integration, albeit under regulated conditions.

Therefore, individual citizens and residents are now legally permitted to buy, sell, and hold cryptocurrencies, but this activity occurs within a regulated environment managed by the central bank and financial supervisors. Platforms and financial institutions facilitating these transactions are expected to operate under forthcoming or existing regulations, likely including KYC/AML requirements.

3. Specific Relevant Text Excerpts/Summaries:

  • Reversal of Ban (June 2024): "The Central Bank of Bolivia (BCB) has officially lifted the ban on the use of “cryptocurrencies”, which prohibition was put into effect through Resolution 144/2020 of December 15th., 2020. This historic move follows the enactment of a new Resolution of the Board Nº 082/2024 of the Central Bank of Bolivia issued on June 25th., 2024 that reaffirms the validity of Virtual Assets (cryptocurrencies and other digital assets)..."

    • Source: Estudio Nunes & Asociados (Legal Firm Analysis)

  • Permitted Transactions: "By mid-2024, Bolivia made a surprising reversal. The Bolivia crypto legalization effort was formalized with the Board Resolution N°082/2024, which repealed the previous bans and allowed cryptocurrency transactions under regulated conditions. The resolution enabled: The use of Electronic Payment Instruments (EPI) for virtual asset transactions. Regulatory oversight for virtual asset providers..."

    • Source: Cointelegraph (Financial News Outlet)

  • Status as of March 2025: "As of March 2025, the country has moved toward a structured regulatory framework: Legal status: Cryptocurrencies are not legal tender but can be traded through regulated electronic channels... Regulatory oversight: The BCB, Autoridad de Supervisión del Sistema Financiero (Financial System Supervisory Authority), and Unidad de Investigaciones Financieras (Financial Investigations Unit) are responsible for ensuring financial security, preventing illicit transactions and educating the public on the risks of crypto investments."

    • Source: Cointelegraph (Financial News Outlet)

  • Financial Institution Involvement: "Bolivia's financial regulator [ASFI] supports new service [Banco Bisa's USDT custody]... saying that it allows clients to carry out crypto transactions within the country's regulatory framework. The regulator said this reduces the risks of unsafe interactions in the crypto market."

    • Source: CoinMarketCap (Crypto Data Aggregator/News)

  • Clarification on Legal Tender: "However, the central bank clarified that cryptocurrencies are not accepted as forms of legal tender. Thus, although crypto assets are tradable via banks, the Bolivian government does not recognize them as legal tender, and companies are not required to accept them as payment."

    • Source: Cointelegraph (Financial News Outlet)

  • Increase in Trading Volume Post-Legalization: "Bolivia has experienced a significant increase in cryptocurrency transactions over the past three months following the legalization of digital payment channels. The Bolivian Central Bank recently reported that the country's monthly virtual asset trading volume surged from $7.6 million to $15.6 million... This growth is attributed to the implementation of Executive Board Resolution No. 082/2024..."

    • Source: Binance News (Crypto Exchange News Arm, citing Odaily)

4. Source Links:

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