Bolivia's president-elect Rodrigo Paz intends to leverage blockchain technology to overhaul public procurement processes. Paz secured victory in Sunday's runoff election, defeating rival Jorge Quiroga with 54.5% of the vote, according to reports. He is set to assume office on November 8, inheriting an economy grappling with fuel shortages and restricted access to US dollars.
Paz's government platform outlines two key proposals involving blockchain technology. The first aims to automate state purchasing decisions through the use of blockchain and smart contracts. The second initiative will enable citizens to declare their cryptocurrency assets into a newly established foreign-exchange stabilization fund. These proposals are detailed within the Partido Demócrata Cristiano's official 2025 government program. The proposed blockchain procurement system is designed to eliminate human discretion in contract processes, thereby reducing opportunities for corruption among officials who might seek to manipulate purchasing outcomes.
The crypto asset declaration program serves a distinct purpose: to establish a legal framework for Bolivians to report their digital holdings. The government plans to convert these declared assets to bolster the national currency, particularly during periods of dollar scarcity. This strategy positions cryptocurrency as a financial tool rather than adopting it as legal tender, differentiating it from approaches like El Salvador's.
Economic Pressures Drive Policy Innovation
Bolivia is currently facing significant economic challenges that necessitate these proposed reforms. The nation has been experiencing persistent fuel shortages, which disrupt daily commerce and economic activity. Furthermore, limited access to US dollars impedes international trade and creates bottlenecks in payment systems. These challenging conditions have prompted the government to explore alternative financial mechanisms.
The foreign-exchange stabilization fund is intended to address immediate liquidity needs. By allowing citizens to declare their cryptocurrency holdings, Bolivia can access convertible assets without the long-term risk of holding volatile tokens. This provides a degree of flexibility during periods of economic stress. This approach contrasts with El Salvador's model of adopting Bitcoin as legal tender, as Bolivia's focus remains on practical governance applications rather than ideological stances on cryptocurrency.
Several Latin American nations are anticipated to incorporate Bitcoin into their reserves as a hedge against inflation. Bolivia's measured approach aligns with broader regional trends toward integrating cryptocurrency. Countries experiencing high inflation rates are increasingly viewing digital assets as potential tools for achieving monetary stability.
In June 2024, Bolivia's central bank lifted its operational ban on cryptocurrency transactions. In the subsequent months, average monthly digital asset trading volumes experienced a doubling. By June 30, monthly crypto trading volumes reached $46.8 million. Major auto distributors, including Toyota and Yamaha, began accepting USDT by September, indicating a growing real-world demand for crypto payment options among merchants.
Global Acceleration of Government Blockchain Adoption
Bolivia is joining an increasing number of governments worldwide that are exploring the application of blockchain technology for administrative reforms. The World Economic Forum estimates that between 10% and 30% of investment in publicly funded construction projects may be lost due to corruption. Given that public procurement accounts for 29% of general government expenditure in OECD countries, there is a substantial financial incentive to enhance transparency in these processes.
Blockchain applications in procurement offer tamper-proof records of evaluation criteria and bid submissions. This technology prevents public officials from retroactively altering contract terms without creating a visible audit trail. Such transparency enables watchdog organizations and citizens to monitor government spending in real time. Colombia's pilot blockchain procurement program demonstrated these benefits in earlier implementations.
However, legitimate concerns exist regarding the implementation of blockchain technology in government applications. Scalability remains a technical hurdle for systems that need to process high transaction volumes. Balancing the need for vendor anonymity with transparency requirements presents another challenge. Furthermore, the initial implementation costs can be substantial, particularly for developing economies with limited technology budgets.
The regional context is important for understanding Bolivia's strategic move. In July, Bolivia signed a memorandum with El Salvador, acknowledging cryptocurrency as a viable alternative to fiat currency. Both nations have pledged to cooperate on developing policy frameworks and intelligence-sharing tools. Monthly cryptocurrency trading data from both countries has shown consistent growth throughout 2025.
Traditional financial institutions are closely observing these government-led experiments. Banks that were initially hesitant to integrate cryptocurrency services are now offering custody solutions for stablecoins. Banco Bisa launched USDT custody services for institutions in October 2024. Amidst dollar scarcity, the state energy firm YPFB explored the use of cryptocurrency for energy imports. These private sector initiatives complement the government's policy changes.
Paz's pragmatic approach, focusing on specific issues of corruption and economic needs, may prove more sustainable than more ambitious declarations of legal tender. This strategy allows Bolivia to navigate the complexities of crypto adoption while potentially avoiding significant political controversy. The inauguration on November 8 will be a critical juncture to determine whether these campaign promises translate into effectively implemented policy.