The Bolivian government announced that it would lift the ban on Bitcoin and cryptocurrencies implemented in 2020. The total value of Bolivia's reserves, including US dollars and gold, has now fallen back to the level of 2006-07. The Bolivian government is seeking to ease foreign exchange shortages caused by declining natural gas exports, which are the country's main source of income before 2021.

Bolivian President Luis Arce believes that cryptocurrency is a solution to Bolivia’s macroeconomic challenges.

It is reported that the Central Bank of Bolivia (BCB) allows the use of virtual assets through electronic payment instruments (EPI). The bank's president, Edwin Rojas, explained that this new regulation will provide electronic payment channels and tools for the purchase and sale of virtual assets. However, Rojas stressed that according to Law No. 901 of 1986, the country's only legal currency is still the Bolivian Boliviano.

The official announcement of the Bolivian Central Bank stated: "Virtual assets are not legal tender, not cash, and the public is not obliged to accept it as a means of payment. Therefore, the inherent risks of using and trading these assets will be borne by the users of these assets."

To support this shift, the bank also launched a comprehensive training program on July 2 to teach all walks of life about virtual assets. The first phase of the training mainly targets journalists in major cities.

This work ensures accurate dissemination of public information about virtual assets, including their conceptual aspects, characteristics, regulatory aspects, security and risks.

The move is part of a broader effort by Brazil’s central bank to increase awareness of new financial technologies and support the country’s economic modernization.

The value of Bolivia’s reserves, including gold and U.S. dollars, has fallen steadily over the past decade and is now close to levels seen in 2006-2007, according to the World Bank.

From a macroeconomic perspective, lifting the cryptocurrency ban could attract foreign investment into Bolivia, as cryptocurrencies allow for fast and secure transactions around the world. Without traditional currency restrictions, this could encourage individual and corporate investors to diversify their assets in emerging markets such as Bolivia.

Additionally, Bolivia receives a large amount of remittances from citizens abroad and could benefit greatly from this. Cryptocurrencies offer a faster and cheaper way to send money to the country, reducing transaction costs. The adoption of cryptocurrencies could also boost the development of e-commerce.

In most cases, cryptocurrencies allow local businesses to sell products and services internationally without the hindrance of the traditional banking system. This will diversify the country's revenue sources beyond gas exports. In the context of inflation and depreciation of the local currency, cryptocurrencies can provide a more stable store of value. This can protect citizens' savings and increase confidence in the financial system.

However, it is important to note that the country's accidental liberalization of cryptocurrencies could lead to significant systemic risks. The volatility of cryptocurrencies could undermine the balance of payments, as sudden fluctuations in their value could affect international reserves and exchange rate stability. In addition, large-scale adoption of cryptocurrencies requires a strong regulatory framework to prevent credit market disruptions.

These problems could reduce confidence in the traditional banking system and weaken banks' ability to lend. This could limit credit access for businesses and consumers, hinder economic recovery, and increase financial uncertainty, thereby exacerbating the economic crisis.

Ultimately, everything will depend on how regulators implement this new transition process and the macroeconomic expectations of local players.

But in any case, Bolivia opening the door to cryptocurrencies will be another manifestation of favorable conditions after El Salvador.