South American nation, Bolivia, has lifted its ban on crypto transactions. The country’s central bank has given the nod to banks conducting transactions with digital assets like cryptocurrencies.
The move is part of Bolivia’s efforts to modernize its payment system. Let’s discover more about this important news for crypto in South America.
Bolivia Reverses Crypto Transaction Ban
The Central Bank of Bolivia said the move would help improve the nation’s weak economy. And also align with the broader crypto regulations in Latin America. Bolivia first announced a ban on crypto use in 2014. The nation’s government later restricted banks from interacting with digital assets in 2020.
The central bank, however, clarified that it does not recognize crypto as legal tender despite withdrawing the ban. However, it does mean that banks can transact in cryptocurrencies via recognized electronic channels.
So, Bolivia’s central bank further plans to create an education and awareness plan for the public on cryptocurrencies. The plan would seek to address and explain the risks involved in interacting with cryptocurrencies. This is somewhat similar to a rule imposed by the UK’s Financial Conduct Authority (FCA) demanding crypto firms inform users of the risks of crypto activities.
Growing Crypto Adoption in Latin America
Latin American countries have seen worsening economic conditions in recent years. Residents of these nations have turned to cryptocurrencies. Some use crypto as a hedge against inflation. Others rely on crypto as a store of value.
El Salvador made history in 2021 when it announced Bitcoin as a legal tender. While the move was widely criticized at the time, the Latin American nation appears to have justified its stance on Bitcoin over the years.
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Other countries, like Brazil, have shown huge interest in crypto. Brazil has a 15% tax on crypto profits. Argentina recently elected a pro-crypto candidate, hoping to turn the nation’s economy around with modern approaches.
Mexico accepts Bitcoin for transactions. However, Mexico does not recognize crypto as an official currency. Interestingly, Mexico taxes profits made from selling crypto on centralized exchanges like Binance.
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