Cryptocurrency might just become a lifeline for Bolivians. The country’s economy is plummeting as inflation hits 25%, the highest in 34 years. Government budgets have run a deficit for 11 consecutive years, and foreign debt makes up a quarter of GDP. So what did the citizens do? Pivot to crypto. Crypto payments have surged 5x, reaching nearly $300 million in H1 2025, after a decade-long ban was lifted recently.
Bolivia is a clear example that cryptocurrencies are not speculative anymore, but an even better way to do commerce. To Bolivians, cryptocurrencies hold more buying power than their local currency.
More and More Bolivians Turn to Digital Currencies Amid Wobbly Economy
While risky and volatile, Bolivians believe crypto is an escape route from the failing economy, and it’s evident in their day-to-day transactions. At El Alto airport, candy and sunglasses are priced in USDT. The state oil company is authorized to use stablecoins for international payments. A top university pays international lecturers in Bitcoin.
More Bolivians are turning to crypto to do business and protect their savings. From small coffee shops to large firms, digital currency is gaining traction across this South American nation of 11 million people. Crypto transactions hit over 600% in the first half of 2025, signalling interest in digital asset payments. When importers can’t access dollars to make urgent payments, cryptocurrencies become the next alternative.
What does this mean for Bolivia and the crypto ecosystem? It’s simple! Bolivia is a test case that cryptocurrencies can complement fiat transactions. They are free from monetary controls and definitely the government. Inflation has ravaged Bolivians’ savings and purchasing power, making buying everyday goods, mostly of which are imported, costly. While digital currencies still make up a minority of Bolivia’s economy, they have become popular among Bolivians. Undeniably, they will become a larger part of Bolivia’s economy, especially with the recent agreement with El Salvador.
Has Cryptocurrency Use Come to Stay?
It’s impractical to limit the use of cryptocurrencies in a country where its citizens have embraced crypto transactions through and through. Since the government lifted the crypto ban a year ago, digital asset transactions have exploded. Most shops in Bolivia have a QR code displayed that links buyers to a crypto wallet. Besides, these people chose digital currency because they want to preserve their savings. While Bolivians march to the polls on August 17, the deepening economic crisis may not reverse any outcome.
While cryptocurrencies offer an escape route, they come with risks. Stablecoins, such as USDT, have been known to have poor compliance with the government. They failed to audit their reserves and even paid $41 million to settle with the United States government over reserves manipulation. However, CEO Paolo Ardoino has confirmed that Tether, the issuer of USDT, will fully register in the United States, as per the recently signed GENIUS Act.
Remember the implosion of Terra in 2022? The algorithmic stablecoins crashed after massive withdrawals. Bitcoin is also known to have price swings, which can affect conversion. However, it seems Bolivians care less, as far as it’s better than Bolivianos.
What’s Next for Bolivians?
Mauricio Dulon, the co-organizer of a crypto summit in La Paz, Bolivia, said the crypto companies envision Bolivia as the epicenter of the crypto ecosystem in Latin America. It’s a clear indication that crypto providers will troop in to take advantage of the plummeting economy. Local firms, such as Red Enlace, are rolling out upgrades to accommodate demands.
Last week, Bolivia signed a pact with El Salvador to accelerate crypto adoption. The agreement will see both countries share crypto intelligence tools and partner on policy development that will help modernize Bolivia’s financial system. El Salvador was the first country to legalize Bitcoin as legal tender. Bolivia believes El Salvador could provide valuable insights on how to navigate the current regulatory and economic challenges Bolivians currently face. It’s clear that Bolivia is warming to digital currencies.
Bolivia isn’t the only country that’s making a strategic pivot to crypto amid a dwindling economy. Argentina and Venezuela have seen increased cryptocurrency transactions of late to combat rising inflation. The people are adopting digital assets as a store of value, but it hasn’t become a widespread medium for commerce yet. Unlike Venezuela and Argentina, where crypto is mainly a hedge, Bolivia is making crypto a practical tool for transactions, replacing its highly inflated currency.
