ASFI explains that currencies can be valued as money only when they have a backup coming from a Central Bank. Bitcoin and cryptocurrencies have been forbidden in Bolivia since 2014.
For the Authority of the Financial System of Bolivia (ASFI), bitcoin cannot be considered as money. In the opinion of the institution of the South American country, only currencies backed by central banks can be valued, as recent statements make clear. ASFI still has its eyes on bitcoin and the rest of cryptocurrencies, banned since 2014 by the Central Bank of Bolivia.
Now, the executive director of the organization, Lenny Valdivia, reflected on the weakness that they see in cryptocurrencies: he suggested that Bolivians must study in detail how they invest their money. Likewise, he urged warning about “irregular elements” in what he considered as high-risk investments.
For Valdivia, the lack of support from central banks or physical assets of cryptocurrencies could cause a drastic loss of value for any of those assets. The executive highlighted the prohibition of cryptocurrencies in Bolivia, ensuring that bitcoin, and other digital assets, cannot work in legal exchange operations in the South American country.
In the same vein, Valdivia referred to cryptocurrency exchange platforms, which operate outside the jurisdiction and, therefore, the control of the Bolivian authorities and their laws.
Many Latin American governments see anonymity as a problem. The Bolivian regulator hinted at the ASFI representative in her statements, referring to the “ease” that this element provides in the potential execution of transactions regarding money laundering, drug trafficking, and even terrorist financing.
Bolivia, Bitcoin, and Cryptocurrencies
Despite the ban, in Bolivia bitcoin and other cryptocurrencies make a normal life in the market. In the country, it is possible to access the sale of crypto assets in P2P markets such as Binance, Paxful, LocalCryptos, or LocalBitcoins. Volumes in the latter have increased during 2020, surpassing countries such as Paraguay and even Uruguay.
Although the interest in bitcoin trading has been growing fast, the Bolivian ecosystem has shown a lack of education about the crypto world. Ignorance has let happen various scams and pyramid schemes that offer false returns to the South American country.
Various leaders have been warning about this type of scheme in the country. But while Bolivia is betting on a total ban, other countries seek friendlier regulations that allow the development of business with cryptocurrencies and a population that understands the risks of this industry.
Bolivian Justice about Crypto scams
Bolivian justice recently put behind bars another of those involved in the scandalous pyramid scheme that happened a few months ago. Abigail P. T, 23, secretary of the fraudulent company Bitcoin Cash, has been presented by the Special Force to Fight Crime (FELCC) to be tried for a cryptocurrency scam.
According to sources in the country, the director of the FELCC, Carlos Prada, reported that the citizen is one of those involved in the collection of money for the pyramidal scam with cryptographic currencies that took place last June. This case affected 100,000 people in the whole country, getting away from users at least 55 thousand dollars.
By: Jenson Nuñez
