Bolivia’s state energy firm YPFB is set to use cryptocurrency for energy imports due to foreign currency shortages. The system has been established after government approval, though the specific cryptocurrency remains undisclosed. Amid protests related to fuel shortages, Bolivia’s cryptocurrency landscape is evolving after the central bank lifted a ban on digital assets in 2024, coinciding with significant trading increases.
Bolivia’s state-owned energy firm, YPFB, intends to utilize cryptocurrency for energy import payments, as reported by Reuters on March 13. This decision arises from the ongoing shortage of foreign currency reserves and a decrease in domestic gas supply faced by the South American nation. A YPFB spokesperson confirmed that a system to facilitate cryptocurrency transactions for energy imports has been established following government approval.
Although the specific cryptocurrency intended for use remains undisclosed, stablecoins, often employed in cross-border transactions, are a possibility. However, it is yet to be confirmed if Bolivia will adopt this approach. The escalating fuel shortage has incited protests and threatened strikes among workers, particularly farmers, jeopardizing the summer harvest, with only 35% to 50% functionality within the public transport sector, as indicated by Energy and Hydrocarbons Minister Alejandro Gallardo.
The YPFB spokesperson clarified that this new purchasing system aims to bolster national fuel subsidies amid the foreign currency crisis, asserting, “From now on, these (cryptocurrency) transactions will be carried out.” In a related development, Bolivia’s central bank, Banco Central de Bolivia, lifted its ban on Bitcoin and crypto payments in June 2024, allowing financial institutions to engage with digital assets.
By September 2024, Bolivia witnessed a remarkable 100% increase in virtual asset trading, with approximately $15.6 million worth traded monthly between July and September, predominantly comprising stablecoins. The momentum for stablecoin utilization accelerated in October 2024 when Banco Bisa introduced a stablecoin custody service—endorsed by the financial regulator—facilitating residents’ transactions with Tether’s USDt stablecoin.
Historically, Bolivia has struggled with cryptocurrency adoption, having banned digital assets since 2014, labeling them as pyramid schemes. In 2016, Cointelegraph noted that the country could significantly benefit from cryptocurrencies, given that a mere 11% of its citizens engaged with debit cards for payments. Despite previous resistance, the nation appears to be shifting towards embracing digital currencies.
In conclusion, Bolivia’s recent strategy to utilize cryptocurrency for energy imports reflects a significant shift in its approach to digital assets. The government’s response to foreign currency shortages and domestic fuel challenges is aimed at enhancing fuel subsidies. With burgeoning cryptocurrency trading and the lifting of a long-standing ban, Bolivia may potentially navigate its financial instabilities by embracing digital currency innovations.
Original Source: cointelegraph.com
