Latam Insights: Bolivian Crypto Market Overheats, Chile Belittles Bitcoin
Welcome to Latam Insights, a compendium of the most relevant crypto and economic news from Latin America over the past week. In this issue, the Bolivian cryptocurrency market keeps growing after the repeal of a blanket ban, the Central Bank of Chile rejects bitcoin, and Bolivian attorneys propose implementing USDT to invigorate the Bolivian economy.
Bolivia Becomes a Hotbed After Lifting Crypto Blanket Ban
Bolivia, one of the smallest economies in Latam, is growing its crypto adoption levels. In a press release shared on November 25, the Central Bank of Bolivia highlighted this rise in crypto activity, stating that it has “dynamized the national payment system.”
Data from the central bank indicates that purchase and sale operations for digital assets rose 112% after lifting the blanket ban that forbade banks and payment institutions from facilitating their channels for these operations.
The bank now estimates that over 252,000 Bolivians hold digital assets, completing trade operations on different platforms. Edwin Rojas Ulo, president of the bank, specified that the volume moved in these operations exceeded $75 million in the last four months (July-October 2024), a very relevant increase compared to $46.4 million traded during Q1 and Q2 2024.
Read more.
No Bitcoin! Central Bank of Chile Rejects Adding BTC as a Reserve Asset
The Central Bank of Chile outright denied the possibility of adding bitcoin or any cryptocurrency as part of its assets, stating that these did not comply with the requirements issued by organizations like the International Monetary Fund (IMF) to become foreign reserve assets.
In this sense, the bank stated that “international reserves were destined to maintain the economic and financial stability before external shocks and a changing monetary policy.” Consequently, these must comply with high criteria in the areas of security, liquidity, and quality defined by the IMF to provide central banks “immediate availability with limited impact on the market and efficient access in case they need to be used in periods of crisis.”
The bank states that neither bitcoin nor other cryptocurrencies fulfill the criteria exposed before. Also, there would be legal reasons to block the inclusion of bitcoin or the enactment of a strategic bitcoin reserve.
Read more.
Bolivian Attorneys Spearhead USDT Index Proposal to Energize a Dollar-Starved Economy
Bolivian attorneys Iver von Borries and Javier Romero Mendizabal proposed introducing Tether’s USDT, the largest stablecoin in the cryptocurrency market, as an index asset for commercial and civil contracts. The submission aims to link USDT’s value in global markets to the national fiat currency, allowing for more flexibility in pricing certain obligations. Bolivia has maintained a fixed dollar exchange rate since 2011, and the disparity between the official and parallel rates, along with the scarcity of physical dollars, has contributed to the paralysis of large projects in the country. Von Borries stated that using USDT and its exchange rate would help unblock these projects and reactivate the Bolivian economy.
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