Bolivia joins forces with El Salvador to create an encryption alliance! Amid economic difficulties, USDT sees an average daily trading volume of 600,000 USD, becoming a "silent revolution".

One year after lifting the ban on Crypto Assets, Bolivia signed a Memorandum of Understanding (MoU) with Bitcoin fiat pioneer El Salvador to jointly promote digital asset policies and infrastructure. The Central Bank of Bolivia explicitly views Crypto Assets as a "viable alternative" to traditional fiat, especially for households and small micro-enterprises. The economic predicament is the core driving force: over the past decade, forex reserves have fallen by 98%, and the local currency has severely depreciated in the black market, prompting the public to turn to Bitcoin and USDT stablecoin. Currently, small micro-businesses in sectors such as dining and beauty widely accept Crypto payment, and the state-owned oil company YPFB also plans to use it for fuel imports.

I. Latin American Crypto Alliance: Bolivia Leverages El Salvador's Experience

Bolivia, which is experiencing economic turmoil, has teamed up with El Salvador, the world's first country to legalize Bitcoin as fiat, to promote cryptocurrency as an alternative to traditional currency.

• Agreement Signing: The announcement from the Central Bank of Bolivia (BCB) indicates that the two countries have signed a Memorandum of Understanding (MoU) aimed at promoting cooperation in the formulation of encryption policies, regulatory strategies, and the sharing of blockchain intelligence tools.
• Immediate Effect: The agreement takes effect immediately and is valid indefinitely.
• Learning Objective: Bolivia views El Salvador as an important model and hopes to draw on its experience of becoming the first Bitcoin fiat currency country in 2021, particularly in establishing effective encryption regulation, risk management, and integrating blockchain into financial infrastructure.
• Official Goal: The BCB statement aims to establish a "safe and regulated" digital asset ecosystem, attract investment, and create new economic opportunities, clearly positioning Crypto Assets as a "viable and reliable alternative" to traditional fiat, particularly benefiting families and small entrepreneurs.
• Key Support: The Salvadoran cryptocurrency regulator (CNAD) will assist Bolivia in understanding the operational and regulatory challenges related to digital assets. El Salvador's pioneering position makes it a strategic partner for Bolivia, which is still in the initial stages of establishing its crypto framework.

2. Economic Predicament: Forex Reserves Plunge by 98%, People Turn to Crypto Payments

The timing of this collaboration is precise, coinciding with the one-year anniversary of Bolivia lifting its years-long ban on Crypto Assets (lifted in June 2024), which opens the door for banks to handle Bitcoin and stablecoin transactions.

• Surge in Trading: Official data shows that by mid-2025, Bolivia's crypto trading volume will reach $294 million, a significant increase from the $46.8 million at the beginning of the ban lift.
• Economic Pressure:
  • Forex Exhaustion: Over the past decade, foreign exchange reserves have experienced a big dump of nearly 98%, plunging from $12.7 billion in 2014 to just $165 million by April 2025.
  • Currency Depreciation: The Boliviano is still in circulation, but its purchasing power has severely shrunk, and the black market exchange rate is significantly discounted. Concerns about further depreciation have led the public to seek USD or USDT as a dollar-pegged stablecoin for hedging.
• Grassroots Applications: Small and micro enterprises, including restaurants, barbershops, and beauty salons, have widely accepted Bitcoin and USDT payments. In city centers, it is no longer uncommon for goods to be directly priced in stablecoins. Tether CEO Paolo Ardoino referred to this phenomenon as a "silent revolution."
• Trading Volume: Former Central Bank President Jose Gabriel Espinoza revealed that in 2025, the daily average transaction volume of USDT will reach 600,000 USD, significantly increasing compared to previous years. Although it still accounts for a small proportion of the overall economy, the adoption rate continues to rise rapidly.
• Institutional Entry:
  • Banking giant Banco Bisa was the first to launch USDT custody service in October last year.
  • The state-owned oil and gas giant YPFB confirmed in March this year plans to use encryption payment in fuel imports.

Conclusion: Bolivia, deeply mired in forex crises and economic turmoil, views Crypto Assets as the key to breaking the deadlock. The strategic cooperation with El Salvador aims to quickly establish a regulatory framework and infrastructure, replicating the experiences and lessons of its "fiatization" path. The spontaneous wave of stablecoin applications in the private sector (with daily USDT transactions averaging 600,000) and the national level's embrace of crypto payments (such as the YPFB import plan) create a responsive crypto transformation trend. In the Latin American region, where traditional financial systems are under pressure, the "Bolivian Crypto Alliance" may provide a new paradigm for emerging economies to explore fiat alternatives, but its effectiveness remains to be tested by time and complex economic realities.