28 Jun
28Jun

As Bolivia grapples with its worst economic crisis in decades, a growing number of citizens are turning to digital assets like Bitcoin and Tether (USDT) to escape rampant inflation and a severe shortage of U.S. dollars. The shift, once considered unlikely in a country that banned crypto until recently, is now visible in everyday life—from paying for fried chicken to salon services.

Rising Inflation and Dollar Scarcity Spark Crypto Adoption

According to a new report from Bolivia’s central bank, digital asset usage is surging across the country. The bank attributes this rise to widespread economic distress, including:

  • Inflation reaching 40-year highs
  • Fuel shortages and long lines at gas stations
  • A black market exchange rate that has halved the value of the local currency
  • Depleting foreign reserves and limited dollar availability in banks

Reuters recently highlighted the city of Cochabamba as a hotspot for crypto use. Here, Bitcoin ATMs let users swap local currency for digital assets, while small businesses—including beauty salons and fast-food outlets—offer discounts for payments made in crypto. “If you go to the banks today, they don’t have dollars,” one resident noted.

Central Bank Data Confirms Explosive Growth

Digital asset usage in Bolivia was effectively banned until June 2024, but since being unbanned, the numbers have soared. Key data from the central bank includes:

  • Transactions via Electronic Payment Channels and Virtual Asset Instruments rose by 530%, from $46 million in H1 2024 to $294 million in H1 2025
  • Total transaction volume since legalization: $430 million
  • Number of recorded transactions: over 10,000

“These tools have facilitated access to foreign currency transactions, including remittances, small purchases, and payments, benefiting micro and small business owners across various sectors,” the central bank said.

Crypto as a Hedge, Not a Sign of Stability

While crypto adoption is growing, some experts caution against interpreting it as a sign of progress. Jose Gabriel Espinoza, former head of the central bank, warned that this shift reflects desperation, not financial innovation.

“This isn’t a sign of stability,” Espinoza said. “It’s a reflection of the deteriorating purchasing power of households.” He pointed out that while USDT daily volumes hover around $600,000, this is still modest compared to traditional and black market exchanges, which handle tens of millions daily.

Platforms and Preferences: Binance Leads, Tether Gains Popularity

Among Bolivians, Binance has emerged as the most widely used crypto platform. Its peer-to-peer trading, low fees, and user-friendly interface have made it attractive in a country where many seek fast, affordable access to hard currency.

Binance’s popularity persists despite its global regulatory challenges—including a $4.3 billion fine in 2023 after pleading guilty to anti-money laundering violations in the U.S.

Tether (USDT) has also gained traction, particularly for retail transactions. Tether CEO Paolo Ardoino shared an image online showing store goods priced directly in USDT, calling it a signal that stablecoins could play a growing role in retail markets in Latin America.

Crypto Culture Divides Generations

Cultural adoption varies across age groups. Businesses report that younger customers are more likely to pay with crypto, seeing it as a more stable alternative to the local currency. Older generations, meanwhile, still prefer to hold on to physical cash, underscoring a generational divide in financial behavior.

Government Plans for Regulatory Framework

To manage this digital shift, Bolivia’s government is now working on a comprehensive regulatory framework for fintech companies, aiming to align with FATF (Financial Action Task Force) standards for Latin America. While the crypto market remains small compared to traditional finance, its rapid growth suggests that more oversight will be needed.


Conclusion: Crypto Rises in Crisis

What began as a workaround for a crumbling financial system is becoming a lifeline for many Bolivians. With official channels drying up and trust in the local currency waning, digital assets—once outlawed—are now offering a new kind of financial freedom.

Whether this trend accelerates or hits regulatory headwinds will depend on how the Bolivian government handles the next phase of its economic and digital evolution.

June 2025, Cryptoniteuae

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