Bolivia turns to crypto for fuel imports amid dollar shortage

Bolivia has approved the use of cryptocurrency for fuel imports as the country faces a severe U.S. dollar shortage and an ongoing fuel crisis.

State-owned energy company Yacimientos Petrolíferos Fiscales Bolivianos (YPFB) received government authorisation through Supreme Decree 5348 to conduct transactions using digital assets.

The move marks a major policy shift for Bolivia, which previously banned cryptocurrencies but now sees them as a way to address its economic challenges.

Declining natural gas exports have reduced the country’s foreign currency reserves, making it difficult to pay for fuel imports. This has led to shortages, long gas station lines, and public protests.

A YPFB spokesperson confirmed that crypto transactions will support national fuel subsidies and ensure stable energy supplies, though no purchases using digital assets have been made yet.

Bolivia's decision aligns with a regional trend, as countries like Venezuela and Argentina have also turned to digital assets to manage financial constraints and facilitate international trade.

While crypto offers advantages such as faster cross-border payments, it also poses risks due to price volatility and regulatory uncertainty.

Bolivia previously banned cryptocurrencies in 2014 over concerns about financial stability and illicit use. However, the ban was lifted in mid-2024, leading to a surge in crypto trading.

The country’s central bank reported a 105% increase in trading volumes between July and September 2024, reflecting growing adoption.

Despite potential benefits, experts caution that cryptocurrency price fluctuations could complicate financial planning and monetary policy.

Bolivia’s move signals a willingness to explore unconventional solutions amid economic challenges. If successful, it could provide a model for other nations facing currency shortages and import difficulties.