Mar 13, 2025

Bolivia Turns to Cryptocurrency for Fuel Imports as Dollar Reserves Dwindle

Bolivia has authorized its state-owned energy company, Yacimientos Petrolíferos Fiscales Bolivianos (YPFB), to use cryptocurrency for fuel imports, marking a significant shift in economic policy.

The decision comes as the country grapples with a severe shortage of U.S. dollars and a worsening fuel crisis. With declining natural gas production and restricted access to foreign currency, Bolivia is looking to digital assets to sustain its energy supply.

For decades, Bolivia was a net exporter of natural gas, but dwindling production and a lack of major new discoveries have forced the country to rely on fuel imports. The situation has worsened due to a sharp decline in foreign currency reserves, leading to fuel shortages, long lines at gas stations, and sporadic protests. The government is under pressure to maintain national fuel subsidies while securing adequate supplies.

Bolivia USD Holdings Data. Source: Trading Economics

A spokesperson for YPFB confirmed that while no cryptocurrency transactions have been executed yet, the necessary infrastructure is in place to facilitate such payments. “From now on, these (cryptocurrency) transactions will be carried out,” the spokesperson stated, emphasizing that the move is designed to help sustain fuel subsidies despite the country’s economic struggles.

Government Expands YPFB’s Financial Tools

Alongside authorizing crypto payments, the Bolivian government has permitted YPFB to purchase U.S. dollars from Banco Unión and other financial institutions. A Supreme Decree was issued to facilitate these transactions, allowing the company to acquire foreign currency at rates determined by the Public Bank and other financial entities.

This measure comes in response to a political impasse in the Legislative Assembly, which has blocked $1.67 billion in loans. The lack of funding has constrained the government’s ability to secure U.S. dollars for fuel imports, exacerbating the crisis.

Bolivia requires approximately $60 million weekly to sustain its fuel import needs. YPFB must now adjust its budget to account for financial costs related to these new payment mechanisms, which will be incorporated into the national fuel subsidy program.

In 2024, Bolivia allocated 15.16 billion bolivianos ($2.19 billion) to subsidize fuel and additives. The continued reliance on subsidies has strained public finances, pushing officials to explore alternative funding methods.

Bolivia has historically maintained a strict stance against cryptocurrency. In 2014, the government banned digital assets over concerns about financial stability and illicit activity. However, mounting economic pressure forced a policy shift in mid-2024, leading to a surge in crypto trading.

According to Bolivia’s central bank, the country experienced a 105% increase in average monthly crypto transactions between July and September 2024. Total crypto trade volumes reached $48.6 million during that period, surpassing the previous six months combined.

Stablecoins, digital assets pegged to fiat currency, accounted for most of these transactions, reflecting growing trust in crypto as a hedge against economic uncertainty.

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