Bolivia’s state-owned power agency YPFB is planning to make use of cryptocurrency to pay for power imports, in accordance to a March 13 report from Reuters. The transfer comes because the South American nation faces a scarcity of overseas forex reserves and a dwindling provide of home fuel manufacturing.
A spokesperson for YPFB mentioned {that a} system had been put in place to make use of cryptocurrency to buy power imports after the federal government accepted using digital belongings to satisfy the nation’s demand. Whereas YPFB has not used the system but, it plans to take action.
The report doesn’t reveal what cryptocurrency shall be used for the funds. Stablecoins, that are digital belongings pegged to fiat forex, are sometimes used to make cross-border transactions, although it’s unclear if that would be the case in Bolivia.
The gasoline scarcity in Bolivia has led to protests and the specter of strikes amongst among the nation’s staff, together with farmers, who say the dearth of gasoline threatens their summer time harvest. Solely 35%–50% of the nation’s public transport system is purposeful. Alejandro Gallardo, the power and hydrocarbons minister, mentioned there are challenges attributable to overseas forex shortages.
The spokesperson for YPFB famous that the brand new buying system was designed to help nationwide gasoline subsidies within the nation amid the scarcity of overseas forex. “Any further, these (cryptocurrency) transactions shall be carried out,” they mentioned.
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Crypto adoption in Bolivia will increase
In June 2024, Bolivia’s central financial institution, Banco Central de Bolivia, lifted its ban on Bitcoin (BTC) and crypto funds, permitting monetary establishments to transact with digital belongings. The ban had been in place since 2014.
In September 2024, Bolivia reported a 100% rise in digital asset buying and selling, with roughly $15.6 million price of belongings traded on a month-to-month foundation between July and September. The $48.6 million traded was largely made up of stablecoins. Stablecoins are sometimes utilized in growing international locations whose native forex has skilled a excessive diploma of devaluation or the place there’s a scarcity of overseas forex.
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Stablecoin use gained additional momentum in Bolivia in October 2024 when native financial institution Banco Bisa launched a stablecoin custody service. That service, which was supported by the nation’s monetary regulator, permits the nation’s residents to purchase, promote and commerce Tether’s USDt (USDT), a US dollar-pegged stablecoin.
Cointelegraph wrote in September 2016 that Bolivia had a lot to realize from adopting cryptocurrencies. At the moment, a lot of that nation’s residents had been unbanked, with simply 11% of residents utilizing a debit card to make funds and solely 5% utilizing bank cards. Nevertheless, the nation continued upholding its ban till 2024, calling crypto a pyramid scheme in Could 2017 and arresting crypto advocates.
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