Historic Crypto Pact: Bolivia & El Salvador Forge Alliance Amid Economic Turmoil
Two Latin American nations double down on digital assets as traditional economies falter.
Breaking the banking mold
While Wall Street hedgies still debate Bitcoin ETFs, Bolivia and El Salvador just rewrote the playbook. Their newly inked crypto partnership signals a radical shift - swapping IMF debt spirals for blockchain solutions.
The Bitcoin beachhead expands
El Salvador's 2021 Bitcoin gamble now gets regional reinforcement. Observers note the deal includes mining infrastructure sharing - a clever end-run around energy bottlenecks that plague solo adopters.
Bankers hate this one weird trick
The pact coincidentally drops as both nations face currency crises. Nothing boosts crypto adoption quite like 40% inflation and capital controls - take that, monetary orthodoxy.
Will the crypto lifeline hold? These economies aren't gambling with play money anymore.
Bolivia Turns To Crypto
Bolivia lifted its ban on digital coins in June 2024 and saw trading volume hit $47 million in just three months. That breaks down to a little over $15 million per month—twice the pace of the previous year and a half.
By June 30 of this year, total volume climbed to $294 million, according to the central bank. Many Bolivians are already using bitcoin and stablecoins for everyday buys. Mobile wallets are popping up in markets where banks rarely reach.
Reserve Crisis Drives Change
Bolivia’s foreign currency reserves fell from almost $13 billion in 2014 to only $165 million by April 2025, based on data from Trading Economics.
That shortfall has made it hard to pay for imports in dollars. Now the state oil firm, Yacimientos Petrolíferos Fiscales Bolivianos, can accept crypto for fuel buys.
Local shops are pricing goods in Tether (USDT) to keep sales steady when the peso wobbles. People are looking to stablecoins as a way to shield themselves from wild swings.
According to analysts, El Salvador’s run at Bitcoin hit speed bumps like high fees and shops that refused to take sats. Bolivia’s leaders say they’ll study those missteps.
The MOU mentions sharing software and best practices—but concrete steps are still missing. Regulators stress that consumer protections and liquidity safeguards must come first.
General elections are set for August 17, with a runoff on October 19 if no one clears 50% or at least 40% plus a 10-point lead.
Based on reports from Polymarket, there’s only a 5% chance of a first-round win. That makes the vote a key moment for crypto policy.
Candidates could either double down on digital finance or slam the brakes if things go wrong. Any change in leadership could reshape the deal’s future.
Bolivia and El Salvador plan to meet regularly to review progress on regulation, tech tools, and financial inclusion. They’ll also look at ways to help families and small businesses get bank-like services through crypto, reports disclose.
Featured image from Adobe Stock, chart from TradingView
