Bolivia’s Executive Order on Cryptocurrency
In a bid to mitigate speculative trading in cryptocurrencies, Luis Arce, the President of Bolivia, has enacted Executive Order 5399, which explicitly bans the state-owned oil enterprise, YPFB, from utilizing cryptocurrencies for energy transactions. This decision, finalized on May 23, comes in response to rising stablecoin valuations on various exchanges, including Binance, as traders attempted to exploit the situation in a profit-driven dollar exchange scheme.
Concerns Over Speculation
Bolivia, a nation that has been gradually progressing towards the integration of cryptocurrency within its financial framework, has found it necessary to curb any speculative activities that could disrupt the economic order. President Arce articulated that while YPFB has not engaged in any cryptocurrency transactions, rampant speculation has generated distortions impacting market expectations, particularly regarding exchange rates. This new directive aims to eliminate such disruptions.
YPFB’s Position on Cryptocurrency
YPFB’s President, Armin Dorgathen, clarified that two main factors have led to the company’s decision against adopting crypto-assets for its energy payments: a lack of acceptance of these digital currencies within the oil sector and the absence of robust regulatory frameworks necessary for conducting such transactions.
He remarked,
“YPFB is not currently engaged in cryptocurrency transactions, nor do we plan to in the immediate future. The majority of companies don’t recognize it as a valid payment method, which makes using it for fuel purchases improbable.”
He further emphasized that the overall transaction volumes within local exchanges are minimal and do not possess the liquidity required for substantial fuel procurement. Earlier in March, there had been reports suggesting YPFB’s willingness to adopt cryptocurrencies due to a pressing foreign currency shortage, a notion seemingly supported by local government reports. However, with the passing of this executive order, such prospects appear increasingly bleak for the time being.
