Key facts
- Bolivia is evaluating a regulatory framework to allow Tether's USDT to be used as a payment currency.
- The move is driven by a persistent shortage of US dollars.
- USDT could be used for payments, savings, and trade, alongside the boliviano and US dollar.
- The government emphasizes the need for strong anti-money laundering safeguards.
- Bolivia lifted its cryptocurrency ban in 2024 and is seeking to integrate digital assets into its financial system.
Bolivia is considering the integration of Tether's USDT into its national payment systems as a potential solution to its ongoing US dollar shortage. Economy and Public Finance Minister Jose Gabriel Espinoza stated that the government is reviewing a regulatory framework that would permit USDT to circulate as a currency for payments, savings, and trade.
This initiative follows Bolivia's decision to lift its ban on cryptocurrencies in 2024 and reflects a broader strategy to incorporate digital assets into the formal financial sector. The proposed framework would require stringent anti-money laundering measures, given Bolivia's current position on the FATF grey list.
The country has faced significant pressure on its foreign exchange reserves, leading to the abandonment of its long-standing peg to the US dollar. This has resulted in a parallel market where the dollar trades at a premium, increasing demand for dollar-denominated alternatives like USDT. Bolivia was noted by Chainalysis for its high crypto adoption rate in Latin America, with substantial transaction volumes.