Bolivia's central bank, the Banco Central de Bolivia, has reversed its stance on cryptocurrencies dating back to 2014, now allowing financial institutions to process digital transactions. This policy shift aims to stimulate Bolivia's economy and bring the country's crypto regulations more in line with those of neighboring Latin American nations. However, cryptocurrencies are not recognized as legal tender, meaning businesses are not obligated to accept them as payment.

Last year, Bolivia prohibited banks from dealing with digital currencies under Board Resolution N°144/2020. The new regulations permit cryptocurrency transactions through approved electronic channels. Additionally, the Banco Central plans to launch an Economic and Financial Education Plan to educate the public about the potential risks associated with digital currencies and how to manage them responsibly.

Effective from June 26, these changes were developed in collaboration with the Financial Investigations Unit, the Financial System Supervisory Authority, and the central bank. This adjustment aligns Bolivia's crypto policies with recommendations from the Latin American Financial Action Task Force, reflecting a regional trend of turning to cryptocurrencies to bolster struggling economies.

Several Latin American countries facing economic challenges and inflation have increasingly viewed cryptocurrencies as a viable alternative to traditional economic models. While acknowledging cryptocurrencies for transfers and payments, Mexico, like Bolivia, does not recognize them as legal tender. In contrast, El Salvador made headlines by becoming the first and only country globally to adopt Bitcoin as legal tender in 2021.