Bolivia and El Salvador partner to make crypto a “reliable alternative” to fiat amid economic crisis

Bolivia has entered into a partnership with El Salvador to promote cryptocurrency adoption, calling it a “viable and reliable alternative” to traditional fiat currencies.

The Bolivia and El Salvador partnership, signed this week, is a major step in Bolivia’s shift toward digital assets as it grapples with plummeting foreign reserves and a weakening national currency.

The Bolivia and El Salvador partnership will focus on policy development, technology sharing, and financial modernization, leveraging El Salvador’s experience as the first country to adopt Bitcoin as legal tender.

With Bolivia’s crypto trading volume surging to $294 million this year, the alliance could accelerate the nation’s transition away from its dependence on the U.S. dollar.

Bolivia and El Salvador partnership: A lifeline for a struggling economy

The Central Bank of Bolivia, in a public letter, framed the Bolivia and El Salvador partnership as a critical step toward financial inclusion.

“Cryptocurrencies offer a viable and reliable alternative for families and entrepreneurs in these challenging times,” said Edwin Rojas Ulo, acting president of the Central Bank of Bolivia.

The agreement comes as Bolivia’s foreign reserves have collapsed by 98% since 2014, leaving the country with just $165 million in April 2025. With the Bolivian boliviano rapidly losing purchasing power, many businesses have turned to stablecoins like Tether (USDT) for transactions.

Juan Carlos Reyes García, president of El Salvador’s National Commission of Digital Assets (CNAD), emphasized the strategic nature of the Bolivia and El Salvador partnership:

“Our experience with Bitcoin adoption provides a roadmap for Bolivia to avoid pitfalls and maximize benefits.”

Crypto adoption surges as Bolivians seek stability

Since Bolivia lifted its crypto ban in June 2024, trading volumes have skyrocketed, reaching $46.8 million in the first three months—double the previous 18-month average. By mid-2025, total crypto transactions hit $294 million, signaling growing public trust in digital assets.

Some gas stations, operated by state-owned Yacimientos Petrolíferos Fiscales Bolivianos (YPFB), now accept crypto for fuel imports—a direct response to dollar shortages. Meanwhile, small businesses are increasingly pricing goods in USDT to hedge against inflation.

Political uncertainty looms ahead of elections

The timing of the Bolivia and El Salvador partnership is critical, as Bolivia heads into a high-stakes general election on August 17. The current socialist government, in power since 2005, faces mounting discontent over the economic crisis.

Polymarket, a crypto-based prediction platform, gives just a 5% chance of a candidate winning outright in the first round. If no contender secures 50% (or 40% with a 10-point lead), a runoff will be held on October 19—potentially reshaping Bolivia’s economic policies, including its crypto strategy.

Key takeaways from the Bolivia and El Salvador partnership

• Bolivia’s central bank sees crypto as a “reliable alternative” amid dollar scarcity.

• Trading volume surged to $294 million in 2025 after the crypto ban was lifted.

• El Salvador’s expertise could help Bolivia avoid regulatory pitfalls.

• Political shifts in Bolivia’s upcoming election may impact crypto adoption.

As the Bolivia and El Salvador partnership unfolds, analysts will watch whether crypto can truly stabilize Bolivia’s economy—or if deeper structural reforms are needed.