Let’s analyze the recent moves of the Bolivian government, which has developed a strategy that includes its largest state-owned oil company and cryptocurrency in a context of currency controls and dollar scarcity..

As a way of curbing stablecoin price speculation, President Luis Arce issued an executive order that prohibits YPFB, the state-owned oil company, from engaging in crypto settlements for energy purposes. While this appeased the local market, where traders hoped to front-run the government, for me, this is a big mistake that closes the door to what might become the largest source of liquidity in trade markets: stablecoins.

Stablecoins are on the verge of becoming very relevant for international settlements, as the White House has adopted the policy of promoting their adoption and use under President Trump’s mandate.

Even if Bolivian authorities claim that they have not processed any purchases with digital assets due to the lack of a counterparty, this does not mean that the market will not change in the future, allowing for this kind of exchange using crypto directly.

Bolivia had also banned the use of crypto in conjunction with its financial system in 2020, effectively closing the local market to innovation. Nonetheless, the Bolivian government lifted this ban, with Edwin Rojas, the president of the central bank, recognizing the relevance of stablecoins as dollar proxies.

I’m sure this ban will also be lifted in time, as stablecoins become more and more used in international trade, including oil, gold, and other commodities. At least Bolivia has shown that it can reverse these decisions when it is needed, and it is still on the way to digitize its economy, having recently announced that a national digital currency was in the design stages of its conception.

Read more: Dollar-Strapped Bolivia to Rely on Cryptocurrency for Energy Imports

Read more: Bolivia Bans State Oil Company From Using Crypto for Energy Settlements

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