Bolivia’s state-owned energy company, YPFB, will begin using cryptocurrency to pay for energy imports as the country grapples with a severe shortage of U.S. dollars and fuel. A company spokesperson and a government official confirmed the decision to Reuters on Wednesday.
The nation faces a critical decline in foreign currency reserves due to years of falling natural gas exports, leading to a fuel crisis marked by long queues at gas stations and sporadic protests. Government officials publicly acknowledged the new payment system, stating that while the mechanism is in place, it has yet to be used.
Although the announcement did not specify which cryptocurrencies would be used, officials have previously emphasized the advantages of stablecoins as digital substitutes for the U.S. dollar. In July, Bolivia’s central bank president, Edwin Rojas Ulo, underscored the benefits of stablecoins, explaining that their use is comparable to trading in U.S. dollars, despite transactions being conducted in digital assets.
Nations facing sanctions from the U.S. or European countries often turn to cryptocurrencies to conduct global transactions without relying on the traditional banking system. Since Bitcoin and other decentralized assets operate outside government control, sanctioned countries can still trade. On top of it hyperinflation and economic instability push people toward cryptocurrencies as a safer store of value than their local currencies. Bitcoin and stablecoins become alternatives when national currencies lose value rapidly.
Countries Using Cryptocurrency for Transactions
Several countries have integrated cryptocurrencies into their financial systems, either for international trade, domestic transactions, or as legal tender:
- El Salvador – Became the first country to adopt Bitcoin as legal tender in 2021, allowing businesses and citizens to use it for everyday transactions.
- Argentina – Due to high inflation, many Argentinians turn to stablecoins and Bitcoin as alternative stores of value. Some businesses accept crypto payments.
- Venezuela – Uses cryptocurrencies, including the state-backed Petro, to bypass economic sanctions and facilitate trade.
- Russia – Has explored crypto payments for international trade to navigate Western sanctions.
- Iran – Uses Bitcoin for imports to avoid restrictions on accessing global financial systems.
- Nigeria – Launched the eNaira, a central bank digital currency (CBDC), and sees widespread crypto use despite regulatory hurdles.
- China – While banning decentralized cryptocurrencies, China has advanced its own CBDC, the digital yuan, for domestic and international transactions.
- United Arab Emirates (UAE) – Dubai has positioned itself as a crypto-friendly hub, allowing licensed exchanges and digital asset transactions.
