Bolivian Central Bank Reportedly Bans Digital Currencies Bitcoin

Here’s an unfortunate news item. It’s being reported that El Banco Central de Bolivia — the Bolivian Central Bank — has banned any form of currency or coin not issued or regulated by the Bolivian government, reports CoinDesk.

This, of course, would include bitcoin and similar digital currencies like “Bitcoin, Namecoin, Tonal Bitcoin, IxCoin, Devcoin, Freicoin, 10coin, Liquidcoin, Peercoin, Quark, Primecoin, and Feathercoin.”

The news was reported originally by the PanAm Post, who points to a resolution dated May 6th “which prohibits the use of coins specifically not issued or regulated by the states,” making Bolivia the first country in Latin America to impose such a ban.

Article 1 of the resolution declares the following (rough translation):

“From the date the use of coins not issued or regulated by states, countries or economic areas is prohibited, and electronic payment orders on coins and currency denominations not authorized by the Central Bank of Bolivia in the field of national payment system.”

What they means is that any product must be denominated in Bolivian currency, which would certainly put a damper on the growth of bitcoin in the country — one of the poorest in Latin America.

The reason? “To ensure the stability of the domestic purchasing power,” according to the board of the country’s central bank.

It’s an all-around disappointment for Bolivians with interest in the digital currency, but we reckon the central bank’s decision won’t be stopping enthusiasts any time soon.