Bolivians embrace crypto to escape soaring inflation

Bolivians have now started shifting to digital assets as issues tied to inflation in the country continue to rise. According to a report by the central bank in Bolivia, residents in the country are now embracing digital assets amid a rise in inflation and continuous US dollar shortages.

The central bank report comes after a recent Reuters report citing that residents are now relying more on digital assets than the country’s currency. For instance, in the district of the Bolivian city of Cochabamba, some ATMs allow shoppers to swap their coins for digital assets, beauty salons offer discounts to customers if they pay in Bitcoin and people use Binance accounts to buy fried chicken.

Bolivians embrace digital assets as inflation continues to rise

The country has been facing a rising economic crisis, with its reserve of dollar near depletion, inflation at 40-year highs, and fuel shortages causing long lines at the pump. The country’s currency has also lost half its value on the black market since the beginning of the year, with the government holding the official exchange rate steady using artificial means. These events have pushed some Bolivians to crypto exchanges like Binance, digital assets like Bitcoin, and stablecoins like Tether as a hedge against inflation.

While official data remains patchy and digital assets were banned in Bolivia until last year, the previous central bank figures showed transactions tied to digital assets at around $24 million in October. However, according to the new figures published by the central bank, transactions carried out using Electronic Payment Channels and Instrument for Virtual Assets (VA) rose more than 530% from about $46 million in the first half of 2024 to $294 million in the same period in 2025.

“These tools have facilitated access to foreign currency transactions, including remittances, small purchases, and payments, benefiting micro and small business owners across various sectors, as well as families nationwide,” the bank said in a statement.

Digital asset transactions were unbanned in June last year, and since that period, transaction volumes reached $430 million with more than 10,000 individual transactions recorded, the bank said.

The Bolivian government is also working on a comprehensive framework for financial technology companies, a move that aligns with the international standards set by the Financial Action Task Force (FATF) of Latin America.

“This (crypto uptick) isn’t a sign of stability,” said former central bank head Jose Gabriel Espinoza. “It’s more a reflection of the deteriorating purchasing power of households.”

Espinoza noted in a previous statement that daily USDT volumes are around $600,000, a fraction of the $18 to $22 million in the formal financial sector and the $12-$14 million in the black market. “While crypto is growing, it’s still a nascent market,” he said at the time.

Binance has been the most popular platform for local users due to its low transfer fees and peer-to-peer trading features. The exchange has also not gone without its fair share of regulatory issues after it agreed to pay a fine of over $4.3 billion in 2023 after pleading guilty to violating anti-money laundering laws in the United States.

In Cochabamba, some outlets allow users to pay using their Binance account or through a Bitcoin ATM linked to Blink, a wallet developed in El Salvador—which made Bitcoin legal tender in 2021. “If you go to the banks today, they don’t have dollars,” Unzueta said. He also explained how the ATMs work. “The idea is to move away from the piggy bank and instead use this technology.”

According to outlets accepting digital assets, they have been able to attract majorly younger customers, who prefer to hold digital assets compared to the elderly ones who prefer to hold cash. Tether CEO Paolo Ardoino also hailed the rise in USDT usage in the country, noting that it could open the gates for stablecoin usage in the retail market. He shared a picture of goods being quoted in USDT alongside his statement.

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