Bolivia finds itself dealing with a severe economic crisis, marked by a drastic shortage of U.S. dollars and declining foreign currency reserves. This situation is somewhat similar to what nearby nations are dealing with as well, particularly Venezuela and El Salvador. Moreover, the broader LatAm, like the rest of the world at this time, is grappling with various socioeconomic challenges.
Amid this turmoil, a somewhat controversial claim surfaced on social media, particularly in a post by @0xcush from Odisea Labs on March 12, 2025.
The government of Bolivia just rugged everyone holding dollars in their bank accounts, and instead is telling people they will get the commensurate amount in the local currency, bolivianos – which is redeemable back to USD for 50% less.
This is why Latin America needs crypto. pic.twitter.com/rfjGFOxNDs
— cush (@0xcush) March 12, 2025
The post alleged that the Bolivian government, under President Luis Arce, had implemented a drastic measure: converting all dollar holdings in bank accounts to the local currency, bolivianos, at a 50% loss when redeemed back to USD.
This claim, tied to Supreme Decree 5348, suggested a “rug pull”—a sudden, unauthorized seizure of assets—leaving citizens with significantly devalued savings.
While subsequent discussions on social media clarified that the specific Banco Unión comunicado cited in the post was actually unverified and potentially even fake, the underlying economic reality in Bolivia lends credence to such concerns.
While it may not be possible to verify the accuracy of every detail or claim, the present situation in the country is not very good.
Like many others in the region, the developing country is facing a major fuel crisis, further exacerbated by an inability to import essential goods due to dollar scarcity.
Official exchange rates peg the boliviano at 6.85 to the dollar, but black market rates soar to 12.5 bolivianos per dollar, reflecting deep distrust in the national currency and the government’s economic policies.
Notably, Supreme Decree 5348, enacted on March 10, 2025, allows the state-owned Yacimientos Petrolíferos Fiscales Bolivianos (YPFB) to access dollars from private banking accounts to fund fuel imports, raising concerns about potential capital controls or forced currency conversions.
This situation has reignited debates about the role of cryptocurrency in Latin America, a region prone to currency devaluation and economic instability. @0xcush ’s post argued.
“This is why Latin America needs crypto,” highlighting how decentralized digital currencies could offer an alternative to volatile local currencies and government-imposed restrictions.
Data from blockchain analytics firm Chainalysis shows strong grassroots crypto adoption in countries like Argentina, Venezuela, and Brazil, driven by hyperinflation and currency crises.
For Bolivia, Bitcoin and other cryptocurrencies could provide a hedge against dollar shortages and preserve wealth outside the reach of state intervention.
However, these claims and strategies have not yet been proven but that’s also because the crypto ecosystem is in its early stages of development and adoption.
While the immediate claim of a forced conversion remains unconfirmed at the time of writing, Bolivia’s overall economic challenges underscore the appeal of crypto as a potentially viable tool for financial sovereignty and independence.
As the ongoing crisis unfolds and we move further into 2025, the LatAm region’s growing embrace of DLT / blockchain technology andweb3 may offer a lifeline for citizens seeking stability in increasingly uncertain times. But Bitcoin and crypto may not be the answer to all problems, as their proponents like to claim. Notably, El Salvador had announced that it would accept Bitcoin as legal tend, but the overall adoption of BTC remained low.
Recently, El Salvador has made it optional for merchants to accept Bitcoin. Moreover, the IMF has also pressured the country to change its policies and overall approach towards crypto. Despite these developments, El Salvador continues to accumulate BTC at a steady pace, unmatched by even some of the world’s most developed nations.