Bolivia has passed a law that allows the government to sell up to 50% of its gold reserves in dollars, as a measure to ease the internal scarcity of dollars. The law gives the government the authority to negotiate the sale of 22 tons of gold out of the almost 44 available in the local reserves. The initiative was presented in 2021 but was only recently passed by the Congress, which is dominated by the party of Bolivian President Luis Arce.
Swift Approval to Avoid Currency Production Difficulties
Jorge Richter, a presidential spokesperson, explained the objective of the swift approval of the law, stating that the country has a tool to avoid difficulties in the production of North American currency. Almost all Bolivian banks had previously established a $300 daily withdrawal limit for their users, and the Central Bank of Bolivia had to organize direct sales to satisfy the local demand for foreign currency.
Argentina Bans Fintech Companies from Using Cryptocurrency Assets
On May 4, the Central Bank of Argentina issued a communication banning certain fintech providers from using cryptocurrency assets or offering services linked to digital assets or other assets that are not regulated by the competent national authority and authorized by the Central Bank of the Argentine Republic to their customers. The measure affects fintech companies that provide direct payments accounts, including Ualá, MercadoPago, Personal Pay, DolarApp, Nubi, and MODO, among others. Bitcoin Argentina, a national NGO, rejected this measure, stating that it is surprising and unconsulted, and it is not understood what objective the central bank is seeking by prohibiting an activity that is entirely satisfactory and useful for the clients of the local exchanges.
Fitch Upgrades El Salvador’s Credit Rating Despite Bitcoin Adoption
Fitch Ratings, one of the big three credit rating agencies, upgraded El Salvador’s credit rating from CC to CCC+ despite the adoption of bitcoin as a legal tender. The upgrade was due to the successful completion of the exchange and payment of significant global bond write-downs early in the year, and it reflects Fitch’s view that another event of default no longer appears likely. Salvadoran President Nayib Bukele celebrated the change, stating that he cannot wait for Fitch to upgrade it even more once they announce their budget surplus for 2024.