Bolivia's Labor Minister Rodriguez dies, authorities launch probe
President Luis Arce said on Facebook that Rodriguez had always showed his commitment to the Bolivian people.
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Coin Geek
15 hours ago
- Coin Geek
Bolivia taps El Salvador for guidance; Algeria bans 'crypto'
Getting your Trinity Audio player ready... The South American nation of Bolivia lifted its decade-long ban on digital assets a year ago, and since then, trading has skyrocketed. It's now seeking to regulate the sector and has tapped neighboring El Salvador for guidance. While Bolivia warms up to digital assets, Algeria is moving in the opposite direction. The North African country has announced a sweeping ban on 'crypto,' criminalizing all digital asset activities. Bolivia taps El Salvador for 'crypto' guidance The Central Bank of Bolivia (BCB) has signed a Memorandum of Understanding (MoU) with El Salvador's National Commission for Digital Assets (CNAD) to share knowledge and exchange regulatory and technical expertise. The MoU took effect immediately and will remain in force indefinitely, the two revealed in their announcement. The regulators will share their experience in blockchain intelligence tools, data analytics, risk analysis, and market oversight. They'll also jointly train their staff and exchange information on virtual asset service providers (VASPs) operating in both countries. BCB Acting President Edwin Rojas Ulo, who signed the agreement with CNAD's Juan Carlos Reyes García, says it's part of the Bolivian government's ongoing efforts to promote digital asset adoption in the country. However, Bolivia is keen to ensure this growth is within the existing legal framework and protects investors while preserving monetary stability. CNAD reiterated its commitment to promoting digital assets in the region, with Garcia pledging the agency's support to any South American country expanding its 'crypto' presence. El Salvador was the first country globally to adopt BTC as legal tender (although it didn't pan out as President Nayib Bukele expected); Garcia says this has equipped it with experience in managing digital assets, and it's willing to lend this expertise to its neighbors. The MoU is Bolivia's latest effort to boost digital asset adoption after lifting its decade-long ban in June 2024. While announcing the ban in 2014, it claimed it was protecting its official currency, boliviano, from depreciation and preventing 'crypto' use in illegal activities like money laundering and tax evasion. Ten years later, the government changed tune as adoption peaked in other Latin American nations like Argentina, Brazil, Venezuela, and El Salvador. According to BCB data, digital asset transactions soared over 500% in the first six months of this year to hit $294 million. Source: BCB Digital assets 'have facilitated access to foreign currency transactions, including remittances, small purchases and payments, benefiting micro and small business owners across various sectors, as well as families nationwide,' the central bank said. For Bolivians, digital assets offer the best alternative amid a steep depreciation of the local currency and peak inflation. This year alone, the boliviano has lost half its value against the USD in the black market, with official dollar reserves plummeting to near zero. Algeria bans digital assets As Bolivia opens up to digital assets, Algeria is heading the other way. The North African nation has enacted a new law that criminalizes any use, exchange or mining of digital assets. According to a local report, the crackdown was enacted through Law No. 25-10 of July 24, 2025, and takes effect immediately. Under Article 6A, Algerians are prohibited from issuing, purchasing, selling, possessing, using, or promoting digital assets. It's also illegal to develop or operate trading platforms or digital wallets, individually or through third-party online platforms. Beyond trading, Algeria has also banned block reward mining. The country's mining activities are insignificant compared to other African countries like Ethiopia, but it is gaining ground in the southern provinces where electricity is much cheaper. Algerians who violate the new law face a prison sentence not exceeding one year, a fine ranging from 200,000 dinars ($1,500) to 1 million dinars ($7,700), or both. These penalties could be heightened if the 'crypto' usage is linked to other forms of organized crime, like money laundering. The new ban was unexpected and bucks a global trend where governments are racing to enact the friendliest laws to boost adoption and attract global capital. It also comes against the backdrop of rapid adoption in Algeria. According to a Chainalysis report last September, the country was the fourth-fastest growing by value received in the Middle East and North Africa (MENA) region, outpacing titans like the United Arab Emirates, Israel, and Egypt. Source: Chainalysis Watch: Is your company ready to ride the wave of blockchain adoption? title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen="">
Reuters
3 days ago
- Reuters
Investors betting voters in Bolivia will make a turn to the right
Aug 8 (Reuters) - Bolivia's international bonds have rallied ahead of a fiercely contested presidential election, fueled by investors' hopes that a political U-turn could help shore up the country's fragile economy and pave the way for an IMF program. The South American nation of 12 million people is engulfed in a crisis marked by inflation at a four-decade high, dwindling dollar reserves and a fiscal squeeze in which the government must choose to service debt or pay for fuel and food imports. Bolivia's international bonds, however, have enjoyed a stellar rally since the start of 2025. With a return of more than 30%, they are one of the top performers in JPMorgan's emerging markets bond index, which across the asset class has returned slightly more than 7%. Citigroup recently upgraded its assessment on Bolivian bonds to "neutral" from "underweight." Having started the year below 60 cents, Bolivian government bonds have scaled multi-year highs in recent days and are trading in the mid-70 cent range - well above the 70 cent threshold below which debt is seen as being in distress. (.JPMEGD), opens new tab, , A change in government "is likely to be quite positive for the economy, which has been on an unsustainable fiscal and current account position for so many years," said Carlos de Sousa, emerging markets debt strategist at Vontobel Asset Management. "A restructuring could be avoided, particularly if the country gets an IMF program soon after," de Sousa said, adding that turning to the International Monetary Fund for support would be a political choice. Bolivia's political landscape is dominated by a power struggle that has fractured the incumbent left-leaning Movement to Socialism (MAS) party. Polls show it winning about 12% of the vote in the first round of the elections on August 17. Evo Morales, who ruled the country from 2006 to 2019 under the MAS banner, has been barred from running for another term as president. Betting websites peg the chances of a win for center-right businessman Samuel Doria Medina, the National Unity party's presidential candidate, at more than 50%. Favored by markets, he has pledged to restore central bank autonomy, tackle a dollar shortage and take on corruption. To avoid a runoff, which has been scheduled for October 19, a candidate must secure more than 40% of the vote as well as have a lead of at least 10 percentage points. The election is taking place at a critical time for Bolivia's $50 billion economy. Central bank-financed fiscal deficits have become a major flash point, revenues from gas exports - a big source of hard currency for the government - have dwindled and the central bank has been forced to spend precious reserves defending the boliviano currency's peg to the dollar. The gap between parallel and official exchange rates has blown out to 80%, the IMF says. Despite the recent spurt of optimism, investors remain worried that political infighting and falling gas export revenues could jeopardize the country's ability to service upcoming debt payments - large chunks of which are due in the first quarters of the next three years. Bolivia's external debt amounted to about $13.3 billion by the end of 2024, of which $1.8 billion is in hard-currency bonds and the remainder in multilateral and bilateral loans, according to its central bank. Foreign exchange reserves were at a record low of about $165 million in April, central bank data shows. JPMorgan calculates that the country's liquid reserves are only $100 million. The IMF puts reserves at two months worth of imports - well below the minimum threshold of the equivalent of three months. Earlier this year, the three major credit rating agencies downgraded Bolivia's rating deeper into junk. S&P Global said the economic circumstances could impair the government's ability to service debt over the next six to 12 months. Some relief may come from loans worth more than $1 billion from official lenders like the World Bank and the Japan International Cooperation Agency that have been secured but not drawn down amid government infighting, and which analysts expect could be unlocked by a new government in La Paz. Monetizing Bolivia's vast lithium deposits could also bring in financing. But the real silver lining - at least for investors - would be an IMF loan program. It would, however, require painful reforms. The IMF said in May, opens new tab that the Bolivian government should ditch the dollar peg, lift capital controls and phase out fuel subsidies, among a raft of other policy changes. It estimates Bolivia's economy will grow 1.1% in 2025 and 0.9% next year - less than half the 2.2% growth expected across broader Latin America this year and the 2.4% forecast for the region in 2026. With a balance of payments crunch looming, analysts say, the next government might not have much choice. "All these liberalizing reforms will eventually allow the economy to flourish, but there's going to be some short-term pain as you shut down money-losing businesses, cut fuel subsidies, and unshackle the economy," said Ajata Mediratta, partner at Greylock Capital Management. "Very few countries can do that in an election year."
Reuters
4 days ago
- Reuters
Bolivia's socialists lose support of the Aymara, once their base
LA PAZ, Aug 7 (Reuters) - The rise in power and influence of the Indigenous Aymara in Bolivia has been the country's biggest political shift of recent decades, driven by the success of former President Evo Morales and the leftist party he founded. But as Bolivia prepares for a general election on August 17, it seems increasingly clear that Indigenous voters are abandoning the ruling Movement to Socialism, or MAS, the party that once claimed to champion them. Voters from inner-city Aymara and Quechua communities say their loyalty to MAS has been eroded over the country's worst economic crisis in decades, and younger Bolivians in particular say questions of identity now loom less important. "Most Indigenous people are having to deal with how to earn money," said Sayuri Loza, an Aymara social media influencer and daughter of Remedios Loza, the first Indigenous woman elected to Bolivia's national legislature. "The need for economic stability, for education, for healthcare — none of those are being met," said the 42-year-old, who does not plan to cast her vote for MAS. Bolivia has the highest Indigenous population proportionally of any country in Latin America, at about 62%, according to the United Nations Economic Commission for Latin America and the Caribbean. Made up of diverse ethnic groups, the largest are Aymara and Quechua, long the backbone of MAS, which has dominated the country's politics for nearly two decades. Now support for leftist and MAS-affiliated candidates is trailing the right-wing opposition. A July survey by Ipsos CIESMORI showed Andronico Rodriguez, the leading leftist contender, with just 6% support in July, from 19% earlier this year. Another candidate of Aymara heritage, Eva Copa, stood down from the race last week. Such is the rout that the official MAS candidate is polling around 2%, while Rodriguez has distanced himself from the party. President Luis Arce is not seeking reelection. Nearly half of the electorate is under 35 - a generation that has known no political era other than that shaped by Morales, Bolivia's first Indigenous leader, and Arce, his successor. Younger voters like Lirio Fuertes, 29, who runs a fashion brand and teaches the Quechua language on TikTok, said the party's promises fell short. "Indigenous identity was paraded in speeches, flags, and festivals," said Fuertes, who on social media goes by T'ikita Wara, meaning little flower in Quechua. "But it never translated into better healthcare, education, or justice." Loza, a historian who promotes Indigenous traditions on social media, also said public services and financial stability rather than her identity were the key drivers of her vote. Bolivia's emerging middle class, much of it Indigenous, has moved beyond identity politics, and the younger generation spanned diverse professions, said Bolivian sociologist Renzo Abruzzese. "Bolivia's social structure has transformed," he said. The 2006 election of Morales was a historic moment for a nation where Indigenous groups for centuries had felt like second-class citizens. They were forbidden, until the mid-1950s, from entering the square outside the presidential palace. Serfdom was only abolished in 1945. Before his first inauguration, Morales received the chieftain's staff at the pre-Inca site of Tiwanaku, pledging to grant rights to the Amerindian majority. "Today begins a new era for the native peoples of the world," Morales said at the time, surrounded by Indigenous activists who had traveled from as far as the United States. Tensions first emerged with some Indigenous groups in 2011, when Morales wanted to build a highway through Indigenous territory in the Bolivian Amazon. Protests broke out and relations between MAS and those groups suffered. Morales, who served three terms until 2019, is barred from running after a failed attempt to change the constitution to allow a fourth term. He is now in hiding in the coca-growing region of the Chapare, after a court in December issued a warrant for his arrest on child abuse and terrorism charges. The former president denies the allegations. Instead of standing for hope, Morales is now associated with disillusionment, Fuertes said. "Sadly, Evo Morales and this radicalized group that refuses to relinquish power have caused the Indigenous movement to be associated with anti-democracy, with corruption and abuse," she said. MAS did not respond to a Reuters request for comment. The official MAS candidate, Eduardo del Castillo, said last month that the problems in Arce's administration had been "identified." "There are people who believe in us and trust us," he told EFE in an interview last month. This election comes as Bolivia faces its worst economic crisis since the mid-1980s. Natural gas exports have plummeted, inflation is at a 40-year high, and dollars are scarce. The boliviano currency has lost half of its value on the black market this year, even as the official exchange rate has been held artificially steady by government intervention. Urban, business-minded Indigenous voters were questioning the relevance of MAS, and many blamed the ruling party's spend-to-grow model for the downturn, said Quechua political analyst, Andres Gomez. "The 'wallet vote' is starting to outweigh the identity vote," said Gomez. It was still unclear, he said, how that would manifest on election day. Polls show conservative contenders Samuel Doria Medina and Jorge "Tuto" Quiroga leading the race, but neither commands more than 30% support, while around a third of Bolivians remain undecided. If no candidate wins the August vote outright the election will head to a runoff scheduled for October 19. Some Indigenous voters who are passing over MAS were also skeptical of the alternatives. "The right doesn't understand Indigenous Bolivia either," Loza said.
