Bolivia's YPFB Plans Cryptocurrency Use for Energy Imports Amid Currency Shortage
According to Cointelegraph, Bolivia's state-owned energy company, YPFB, is preparing to utilize cryptocurrency for energy import payments. This strategic move comes as Bolivia grapples with a significant shortage of foreign currency reserves and a decline in domestic gas production. A YPFB spokesperson confirmed that a system has been established to facilitate cryptocurrency transactions for energy imports, following government approval for the use of digital assets to address the country's energy demands. Although the system has not yet been implemented, YPFB intends to proceed with its use.
The specific cryptocurrency to be used for these transactions has not been disclosed. While stablecoins, which are digital assets tied to fiat currencies, are commonly employed for cross-border transactions, it remains uncertain if Bolivia will adopt this approach. The fuel shortage in Bolivia has sparked protests and potential strikes among workers, including farmers, who express concerns that the lack of fuel could jeopardize their summer harvest. Currently, only 35% to 50% of the nation's public transport system is operational. Alejandro Gallardo, the energy and hydrocarbons minister, highlighted the challenges posed by the foreign currency shortage.
The YPFB spokesperson emphasized that the new purchasing system is designed to support national fuel subsidies amid the foreign currency shortage. "From now on, these cryptocurrency transactions will be carried out," they stated.
In June 2024, Bolivia's central bank, Banco Central de Bolivia, lifted its longstanding ban on Bitcoin and cryptocurrency payments, allowing financial institutions to engage in digital asset transactions. This ban had been in effect since 2014. By September 2024, Bolivia reported a 100% increase in virtual asset trading, with approximately $15.6 million worth of assets traded monthly between July and September. The $48.6 million traded during this period primarily consisted of stablecoins. Stablecoins are frequently used in developing countries experiencing significant currency devaluation or foreign currency shortages.
Stablecoin adoption gained further traction in Bolivia in October 2024 when Banco Bisa, a local bank, introduced a stablecoin custody service. Supported by the country's financial regulator, this service enables residents to buy, sell, and trade Tether's USDt (USDT), a stablecoin pegged to the US dollar. Cointelegraph previously reported in September 2016 that Bolivia stood to benefit significantly from cryptocurrency adoption, as a large portion of the population was unbanked, with only 11% using debit cards and 5% using credit cards. Despite these potential benefits, Bolivia maintained its ban on cryptocurrencies until 2024, labeling them as pyramid schemes in May 2017 and arresting crypto advocates.
