Bolivia is reviewing a proposal that would give Tether’s USDT a formal role in everyday finance, in what would be another step in the country’s broader effort to bring digital assets into its financial system. Officials say the framework is still under consideration and would include anti-money laundering controls.

A shift in digital asset policy

Economy and Public Finance Minister Jose Gabriel Espinoza said the proposal would allow USDT to circulate alongside Bolivia’s boliviano and the US dollar for both payments and savings. If adopted, the measure would place the dollar-pegged stablecoin within a regulated framework rather than leaving its use to grow informally.

The initiative follows Bolivia’s decision in 2024 to lift its crypto ban. It also aligns with the current administration’s stated commitment to expand access to digital asset services, suggesting that policymakers are looking for practical use cases rather than treating crypto only as a speculative market.

Dollar shortage drives demand

The review comes during a period of pressure in Bolivia’s currency market. The country has been dealing with a prolonged shortage of US dollars after strain on foreign exchange reserves pushed the government to abandon its long-standing currency peg earlier this year.

That shift widened the gap between official and parallel exchange rates, increasing demand for alternatives linked to the dollar. In that environment, USDT has become an increasingly popular payment tool in Bolivia, according to the source article, as households and businesses seek instruments that can preserve dollar exposure for transactions and savings.

Safeguards still under review

Espinoza said the proposed framework would include anti-money laundering safeguards. That element is significant because Bolivia remains on the Financial Action Task Force gray list, making compliance issues central to any attempt to formalize the use of digital assets in the economy.

The article does not say when a final decision could be made or what specific compliance mechanisms would be used. For now, the proposal remains under review, and its legal and operational details have not been finalized.

Part of a broader regional pattern

Bolivia’s consideration of USDT reflects a wider pattern seen in markets where access to US dollars is constrained and demand rises for digital, dollar-denominated alternatives. In Bolivia’s case, the driver appears to be less about crypto trading and more about payments and savings during a period of currency stress.

Whether the framework advances will depend on how authorities balance public demand for dollar-linked instruments with financial oversight requirements. The proposal nevertheless marks a notable stage in Bolivia’s post-ban digital asset policy, coming as stablecoins increasingly serve as a practical substitute when access to physical or bank-based dollars becomes harder.

Source: cointelegraph.com