Virtual currencies have been explicitly banned. In 2014, the Central Bank of Bolivia banned any currency or coins not issued or regulated by the government, including a list of virtual currencies. Using any kind of currency not issued or regulated by the government is illegal and punishable by law. Citizens are prohibited from denominating prices in any currency that is not previously approved by its national institutions.

There has been a government crackdown on cryptocurrency use, with 60 people at a cryptocurrency workshop being arrested in May 2017. Lenny Valdivia Bautista, of Bolivia’s Financial System Supervision Authority (ASFI) reminded the population that virtual currency of any kind is explicitly prohibited. He also warned of the risks of using virtual currencies, noting that individuals may try to “take advantage of personal savings and those of families.” With regard to the arrested cryptocurrency advocates, he said, “We are telling the Bolivian population not to be fooled, not to participate in these closed groups…which take advantage of people and deceive them in order to appropriate their money.”

Even though Bolivia was the first Latin American country to ban cryptocurrencies, private firms have continued exploring blockchain. One such private company is La Paz-based Banco Ecofuturo, which has announced that it will harness the power of blockchain applications. However, the bank’s managing director made sure to acknowledge that the bank does not intend to promote the use of cryptocurrencies.

Sources:

• Perkins Coie- Digital Currencies: International Actions and Regulations
• CoinTelegraph: Cryptocurrencies Banned by Bolivia
• Bitnews Today: How legal are cryptocurrencies around the world?: Bolivia, China and Russia
• CoinTelegraph: Bolivia Calls Cryptocurrency ‘Pyramid Scheme,’ Arrests Advocates
• Library of Congress: Cryptocurrency World Survey
• Antigua Report: Bolivian Bank Explores Blockchain Applications Despite Ban