Bitcoin is already in Bolivia, but the government ratifies its prohibition

RIO DE JANEIRO, BRAZIL – The use of cryptocurrencies has spread globally and is already in Bolivia. Experts in the matter point out that this trend is irreversible. However, the government banned its use in the financial system and warned the population of possible scams and money losses.

In recent weeks, the Central Bank of Bolivia (BCB) and the Financial System Supervisory Authority (ASFI) emphasized through publications on social networks that cryptocurrencies are not safe and are linked to illicit operations.

“Cryptocurrencies are not legal in Bolivia, and you cannot do banking transactions with them.” “When you manage to buy cryptocurrencies, you don’t get to know the seller; that’s why you can easily be scammed,” says the latest BCB Facebook posts.

The official stance was already clear in 2020. Through a board resolution, the BCB banned financial institutions from “the use, marketing, and trading of crypto assets.”

But cryptocurrencies are already in the country, and in the “wallets” (computer payment systems), you can see “a large number of Bolivian users,” said economist José Espinoza.

What are they? It is virtual money with a volatile value compared to other currencies, such as the dollar. They can be exchanged between users for different purposes and can be used to buy certain products and services: travel, clothing, video games, software programs, among others.

The oldest and most popular cryptocurrency is bitcoin. It was born in 2009, its creator is unknown, but there is a theory that it was a group called Satoshi Nakamoto.

Since then, its use has spread around the world. Thus some companies that make investments with crypto assets already have their sights set on Bolivia, such as Braiscompany.

“We plan to set up in Cochabamba this year; it is a strategic city from where we can expand,” explained the expansion agent of this company, Yuri da Silva, to Los Tiempos.

The representatives of this company, Antonio Neto Ais and Fabricia Ais, started with the business in 2018. “People in Bolivia will have a safe company to invest (in Bitcoin). This is not the future; it is the present, and Bolivia sooner or later will have to regulate,” said Da Silva.

Meanwhile, Espinoza argued that the government’s prohibitionist stance is not the most appropriate and “is not very applicable in reality”. He stated that formal systems could be controlled, but it is impossible to monitor digital applications where this market proliferates.

“They are leaving a fairly large monetary and financial policy space without a north. It is not being clarified what will be the focus 30 years from now, on the means of payment,” Espinoza added.

The analyst does not support either prohibition or regulation, suggesting that as long as there is no clear policy, work should be done on two fronts: first, “to prepare serious studies on the feasibility of dematerializing economic transactions in the country and from there discuss whether crypto assets are legal or not”.

Secondly, “to maintain a serious financial education communication policy that allows individuals to make free but informed decisions”.

The crypto assets expert and manager of the Blockchain consulting firm, Huáscar Miranda, was more drastic when he described the official ban as “nonsense”. For him, work should be done on information and education to prevent people who “get into it without knowing or knowing” from being victims of scams or making bad investments.

“It seems important to me to regulate the use of cryptocurrencies to avoid money laundering, for example. We know that, even if the government doesn’t want to, many people will buy,” he said.

1 BTC OR BITCOIN

At the moment, it is equivalent to US$38,874 or €35,509. This cryptocurrency is one of the most widely used for transactions and purchases of goods and services.

SCAMS AND LOSSES ARE COMMON

The world of crypto assets promises lucrative business and good investments; however, it also presents high risks for users since it is unregulated worldwide.

Scammers are the order of the day. In countries such as the United States and the United Kingdom, millionaire losses have been reported in fraudulent transactions of these digital currencies.

BOLIVIA IS AMONG THE 7 COUNTRIES WHERE THE USE OF CRYPTOCURRENCIES IS PROHIBITED

Bolivia is among the seven countries in the world where the use of cryptocurrencies is prohibited, according to a publication of the Digitaltrends portal. That is the case in Algeria, China, Egypt, Kosovo, Morocco, and Nepal.

In the rest of the countries, there are restrictions on its use, or it is allowed, but with various prohibitions and warnings to users against the risk of scams.

So far, the only country that has 100% legalized bitcoin is El Salvador. Since September last year, the government has allowed all types of transactions with this currency. However, even in this country, the rest of the cryptocurrencies are not recognized.

The fact that most of the population does not have internet access does not impede promoting its use. The government encourages Salvadorans to download a digital wallet application to make Bitcoin transactions.

The sources consulted for this report pointed out that the use of cryptocurrencies is a trend that is unlikely to be stopped and that an open and informed debate on the matter is more convenient.

The Central Bank of Bolivia banned the use of crypto assets in the financial system and payment instruments recognized by this entity. However, its use in a particular way and unregulated platforms is not a crime.