Bolivia to Integrate Crypto and Stablecoins into Financial System
Bolivia will incorporate cryptocurrencies and stablecoins into its financial system as part of an effort to modernize the economy, Economic Minister Jose Gabriel Espinoza announced on Tuesday.
Banks will be permitted to hold crypto assets on behalf of clients, enabling their use in savings accounts, credit products, and loans, according to Reuters. Espinoza said the government intends to recognize and leverage crypto, noting that it cannot be controlled on a global scale.
Amid elevated inflation in Latin America, some Bolivians have turned to stablecoins for savings and daily transactions. Analysts have described government moves to integrate crypto as driven by competitive pressures and fear of missing out.
Inflation drives stablecoin use in Bolivia
The average inflation rate of the boliviano averaged above 22% in the 12 months to October, according to Bolivia’s National Institute of Statistics.
Businesses in the country have begun listing prices in Tether’s USDt (USDT), a dollar-pegged stablecoin, as an alternative to the local currency.
In March, state-owned energy company YPFB announced it is developing a framework to settle energy imports in cryptocurrency, though it has not provided specific details or identified which assets would be used for cross-border payments.
In September, manufacturers including Toyota, Yamaha, and BYD Company began accepting USDT for purchases in Bolivia, responding to shortages of U.S. dollars.
Because the U.S. dollar is critical for international trade and central bank reserves, dollar-linked stablecoins have been used to meet demand and navigate local currency controls. They allow users with a mobile phone and crypto wallet to obtain and hold dollar-pegged tokens without relying on traditional banking infrastructure.
Persistent inflation and stringent currency controls have reinforced the use of stablecoins as an alternative store of value in Latin America and other inflation-affected emerging markets.
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