State-backed Bolivian energy firm YPFB turns to crypto amid painful dollar shortage

The Bolivian state energy company, Yacimientos Petrolíferos Fiscales Bolivianos (YPFB) has announced plans to make energy imports into the country with cryptocurrency as there is a current shortage of dollars within the country. This shortage is due to the dwindling exports of natural gases over the years. 

Up until June 2024, Bolivia’s central bank, Banco Central de Bolivia had a ban placed on Bitcoin and other cryptocurrencies. At the time, the bank cited Bolivia’s struggling economy as the reason for the ban. It also stated that the ban would align the country with Latin American crypto regulations. 

The ban was lifted for a simpler reason — the global acceptance of cryptocurrencies. Other Latin American countries such as El Salvador, Argentina, Brazil, and Mexico had adopted the use of cryptocurrencies before Bolivia jumped on the wagon. 

With its economy still struggling and the reduction in exports, the country is again turning to cryptocurrency as a way out. 

Cryptocurrency for energy 

According to Reuters, a spokesperson for the state-run energy firm YPFB revealed that a system to use cryptocurrency to purchase fuel imports has been put in place. 

The energy firm also said that it had received government approval to use digital assets to help meet demand.

Despite the government’s approval, YPFB has not yet used digital currency to purchase energy imports, but it intends to do so, according to a government spokesperson. 

Bolivia is catching up to other countries within South America with its increased acceptance and adoption of cryptocurrency and digital assets. Countries such as El Salvador and Argentina are integrating digital assets into their financial systems. 

Argentina’s state-owned energy firm, YPF, ventured into crypto mining operations in 2022 and has been supplying power for mining activities while making plans to further expand its crypto mining operations. 

Brazil established a law regulating digital assets in December 2022, and it came into effect in June 2023. The aim of the regulation was to legalize crypto as a payment method. 

Bolivia fuel shortages 

Bolivia’s economy is largely dependent on its vast natural resources. The country’s primary export is natural gas, but it also exports gold, zinc, and silver among other commodities. 

Bolivia’s natural gas exports were valued at $2.05B in 2023 and while this might sound like an impressive amount, those figures are a whopping 31% less than the value of Bolivia’s natural gas exports from the previous year which was valued at approximately $2.97B. 

Following the descending trend, the value of natural gas exports from Bolivia in 2021 was also higher than that of 2022. The exports of natural gas from Bolivia are typically imported by Argentina and Brazil. 

Over the years, the country has been experiencing a significant decline in its exports of natural gas, and as a result, has witnessed a decrease in its foreign currency reserves. 

This shortage of dollars has rendered the country incapable of regular function as it uses the US dollar to import goods, fuel included. 

The lack of dollars led to a fuel crisis in the country, and now, long lines at gas stations and scattered protests are becoming a norm.

Bolivia functioned as a net energy exporter due to its large reserves of gas. The country also utilized its natural resources domestically. However, with the diminishing production, it has become reliant on imports to meet the country’s energy consumption needs.

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