Bolivia -- Travel Rule Implementation Regulatory Overview

The situation regarding the FATF Travel Rule implementation in Bolivia is unique due to the country's existing regulatory stance on cryptocurrencies.

Summary: Bolivia currently prohibits the use of cryptocurrencies for financial transactions and investments within its financial system. As such, there are no legally operating Virtual Asset Service Providers (VASPs) that would be subject to the FATF Travel Rule. Consequently, the Travel Rule has not been adopted or implemented for VASPs in Bolivia.

Here's a detailed breakdown:

Status of FATF Travel Rule Implementation in Bolivia

1. Whether Adopted & Effective Date:

• Not Adopted. The FATF Travel Rule (Recommendation 16, interpreted for virtual assets under Recommendation 15) has not been adopted or implemented in Bolivia.
• Reason: Bolivia's central bank, the Banco Central de Bolivia (BCB), issued Resolution 042/2014 on May 6, 2014, which explicitly prohibits the use of "any type of currency not issued and regulated by the state, such as Bitcoin, for financial transactions and investments." This effectively bans the operation of virtual assets and, by extension, virtual asset service providers (VASPs) within Bolivia's formal financial system.
• Effective Date: N/A, as it has not been adopted.

2. Threshold Amounts:

• N/A. Since VASPs are prohibited from operating, there are no established threshold amounts for the Travel Rule.

3. Which VASPs are Covered:

• None. Due to the prohibition, there are no legally recognized or regulated VASPs operating in Bolivia. If the prohibition were lifted, and a regulatory framework for VASPs were established, then the FATF definition would likely apply, covering entities that conduct activities such as:
  • Exchanges between virtual assets and fiat currencies.
  • Exchanges between one or more forms of virtual assets.
  • Transfer of virtual assets.
  • Safekeeping and/or administration of virtual assets or instruments enabling control over virtual assets.
  • Participation in and provision of financial services related to an issuer's offer and/or sale of a virtual asset.

4. Technical Implementation Requirements:

• N/A. As there is no legal framework for VASPs or the Travel Rule, there are no technical implementation requirements.

5. Penalties for Non-Compliance:

• Penalties for Prohibited Activity: Since the operation of cryptocurrency services is prohibited, any entity or individual engaged in such activities would likely face penalties under general financial laws for operating an unauthorized financial service or handling unauthorized instruments, rather than penalties specifically for "Travel Rule non-compliance."
  • The BCB Resolution 042/2014 indicates that "the financial entities and the institutions under the supervision of ASFI are prohibited from using, operating, and commercializing with currencies not issued and regulated by the state." Engaging in such activities could lead to sanctions from the financial regulator (ASFI) or other legal actions, potentially including fines or criminal charges depending on the severity and nature of the unauthorized operation. Specific penalties would depend on the interpretation of existing laws by Bolivian authorities.

Key Legislation & Guidance

1. Banco Central de Bolivia (BCB) Resolution 042/2014 (May 6, 2014):

   • This is the primary document prohibiting cryptocurrencies.
   • URL (Spanish): While a direct government portal link is sometimes hard to find for older resolutions, a common reference point and a copy can often be found through legal databases or financial news archives. Here's a link to a reliable source referencing it:
     • Lexivox - BCB Resolución 042/2014

2. GAFILAT Mutual Evaluation Reports for Bolivia:

   • As a member of GAFILAT (the FATF-Style Regional Body for Latin America), Bolivia's compliance with FATF Recommendations (including R.15 and R.16) is assessed. These reports would confirm Bolivia's stance on virtual assets. The latest public report (2018 MER) indicated a lack of specific regulation for virtual assets and the existing prohibition. Follow-up reports would re-assess.
   • URL (GAFILAT reports): You can typically find Bolivia's MER and follow-up reports on the GAFILAT website by searching for "Bolivia" in their reports section.
     • GAFILAT Public Reports (Search for Bolivia)

Conclusion: Bolivia remains one of the few countries with an outright prohibition on cryptocurrencies. Until this fundamental policy changes, the implementation of specific regulations like the FATF Travel Rule for VASPs will not occur. Any involvement with cryptocurrencies in Bolivia should be undertaken with extreme caution and with awareness of the existing legal prohibitions.