Bolivia's Central Bank has signed a memorandum of understanding with El Salvador's National Commission of Digital Assets aimed at introducing cryptocurrencies to the economies of both countries.
Financial Partnership between Bolivia and El Salvador
The agreement, signed by Interim Central Bank President Edwin Rojas Ulo and El Salvador's Digital Assets Commission President Juan Carlos Reyes García, takes effect immediately. The partnership aims to modernize Bolivia's financial system and enhance financial inclusion for families and small entrepreneurs. Both countries will collaborate on policy development and share cryptocurrency intelligence tools.
Cryptocurrency as a Response to Bolivia’s Economic Challenges
Bolivia is facing a severe economic crisis, during which its currency reserves have fallen 98% since 2014, from $12.7 billion to just $165 million by April 2025. The country lifted its decade-long cryptocurrency ban in June 2024, allowing banks to process Bitcoin and stablecoin transactions for the first time. By 2025, cryptocurrency transaction volumes in Bolivia surged by 630%, reaching nearly $294 million, indicating growing interest in cryptocurrencies as an alternative to the depreciating national currency.
Lessons from El Salvador's Experience
The partnership with El Salvador comes as the latter adjusts its cryptocurrency policies. Under an agreement with the International Monetary Fund, El Salvador agreed to make Bitcoin acceptance voluntary for private businesses. El Salvador's experience may provide Bolivia with opportunities to avoid pitfalls, endorsing intelligence tools and policy development rather than imposing mandates for cryptocurrency acceptance.
The agreement between Bolivia and El Salvador opens new opportunities for both countries in the cryptocurrency sector, allowing them to tailor implementations to local conditions and economies.
