Toyota and BYD accept USDT payments in Bolivia, while USD forex reserves have plummeted by 98%.

International automotive manufacturers Toyota, BYD, and Yamaha have begun accepting Tether in Bolivia to address their rapidly collapsing US dollar reserves, marking an important step for Latin American countries in adopting Crypto Assets. As Bolivia's forex reserves astonishingly shrink, stablecoins are becoming a lifeline for the local economy.

Global Automotive Giants Shift to Crypto Payments

Tether CEO Paolo Ardoino stated that Toyota, Yamaha, and BYD are adopting Tether (USDT) for Sunday payments, while crypto security company BitGo confirmed that the first Toyota car was purchased using USDT in Bolivia on Saturday.

The image shared by Ardoino shows that dealers displayed some signs promoting USDT as a "simple, fast, and secure" payment method for car purchases. BitGo stated that it is collaborating with Tether and Toyota Bolivia to assist with self-custody while ensuring smooth transactions.

This development has significant implications for global Crypto Assets adoption, as it demonstrates how stablecoins can play a key role in countries where traditional financial systems face challenges.

Bolivia's Dollar Crisis and Encryption Solutions

Bolivia is one of the last countries in Latin America to impose a cryptocurrency ban. It was not until June 2024 that the country lifted its long-standing cryptocurrency ban and allowed banks to handle Bitcoin and stablecoin transactions.

One of the first major adoption cases occurred in March when Bolivia's state-owned oil and gas company Yacimientos Petrolíferos Fiscales Bolivianos received government approval to start accepting Crypto Assets as a solution for fuel imports to address the country's worsening dollar shortage.

Data from Trading Economics shows that Bolivia's forex reserves have plummeted by 98% from $12.7 billion in July 2014 to $171 million in August this year. The Boliviano remains the most widely used currency in Bolivia; however, due to concerns over the declining purchasing power of the Boliviano, many locals are opting for more stable currencies like the US dollar, and in some cases, also choosing Crypto Assets.

Central Bank's Attitude Shift: From Ban to Embrace

The Central Bank of Bolivia even referred to cryptocurrencies as a "viable and reliable alternative" to legal tender, and signed a memorandum with El Salvador at the end of July aimed at accelerating the adoption of cryptocurrencies. This shift in attitude reflects the country's pragmatic approach in the face of an economic crisis.

At the same time, shops at Bolivian airports have been pricing basic goods in USDT to cope with the currency crisis. This practice is expanding from the retail sector to larger commercial transactions, including car sales.

Stablecoins have become key in international trade

TowerBank's digital asset director Gabriel Campa (Gabriel Campa) stated to Bitfinex last Tuesday that Bolivian companies importing products have also been using USDT to address the dollar shortage issue.

They purchase stablecoins locally or through offshore bank accounts, exchange them for US dollars, and then pay overseas suppliers. He indicated that some of these products would later be listed in the form of USDT, thereby creating a stablecoin circular economy to ensure that trade and operations run smoothly.

Political Uncertainty and the Future of Encryption

Bolivia will hold a runoff election on October 19 between the Christian Democratic Party led by Rodrigo Paz Pereira and the Alliance for Freedom and Democracy led by Jorge "Tuto" Quiroga.

To combat corruption, Paz Pereira proposed the implementation of blockchain technology to enhance transparency, while Kiloga's stance on Crypto Assets is less clear. The winning party will lead the country after nearly twenty years in power in Bolivia, and that party bears significant responsibility for the current economic crisis in the country.

Regardless of the election results, the adoption of Crypto Assets in Bolivia seems to have become an economic inevitability, especially in the context of the continuous shrinkage of US dollar reserves. International brands such as Toyota, Yamaha, and BYD accepting USDT payments may further accelerate this trend and provide a noteworthy case study for other Latin American countries.