Bolivia’s top bank called crypto a “viable and reliable alternative” to fiat currencies while signing a memorandum of understanding with El Salvador to accelerate crypto adoption.
The agreement, which will see the two countries collaborate on policy development and share crypto intelligence tools, aims to modernize Bolivia’s financial system and improve financial inclusion for families and small entrepreneurs, the Central Bank of Bolivia said in a letter on Wednesday.
Bolivia’s partnership with El Salvador is notable as El Salvador was the first country to make Bitcoin (BTC) legal tender, and could provide valuable insights into potential economic or regulatory challenges that Bolivia may face.
The agreement — signed by Central Bank of Bolivia Acting President Edwin Rojas Ulo and the National Commission of Digital Assets (CNAD) of El Salvador President Juan Carlos Reyes García — takes effect immediately and for an indefinite duration.
It adds significant momentum to Bolivia’s pro-crypto pivot, which began in June 2024 when Bolivia lifted its long-standing crypto ban and allowed banks to process Bitcoin and stablecoin transactions.
Bolivians are warming to crypto
Three months after lifting the crypto ban, Bolivia’s central bank reported crypto trading volume reaching $46.8 million — averaging $15.6 million per month — doubling the monthly average of the previous 18 months.
This momentum has carried into 2025, with total crypto volume reaching $294 million as of June 30, the Central Bank of Bolivia said in its letter.
Bolivia is turning to crypto amid its currency crisis
This March, Bolivian state-owned oil and gas firm Yacimientos Petrolíferos Fiscales Bolivianos received government approval to start accepting crypto for fuel imports as a solution to the country’s deepening US dollar shortages and import challenges.
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Bolivia’s foreign exchange reserves have fallen a staggering 98% from $12.7 billion in July 2014 to $165 million this April, Trading Economics data shows.
Some Bolivian shops have even begun pricing basic items in the Tether (USDT) stablecoin, signaling an increasing shift toward crypto to navigate the currency crisis.
The Bolivian boliviano remains the most used currency in Bolivia; however, fears over it losing purchasing power have led many to prefer more stable alternatives like the US dollar, or in some cases, crypto.
Bolivia’s future will be decided by October
The agreement comes ahead of Bolivia’s high-stakes general election on Aug. 17, where many hope to see an end to the current socialist regime, which has been in power since 2005.
If no candidate secures over 50% of the vote — or at least 40% with a 10-point lead over the second-place contender — a runoff will be held on Oct. 19.
The crypto predictions platform Polymarket gives just a 5% odds that a candidate will win outright in Bolivia’s first-round election.
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