Bolivia may make a stablecoin official money — why dollar shortages push people to USDT

Bolivia is considering rules that would let Tether's USDT — the world's largest stablecoin — circulate "as just another currency," alongside the boliviano and the US dollar. The move is driven by a stubborn shortage of physical dollars, and it shows why people in strained economies increasingly reach for digital dollars.

A stablecoin is a crypto token designed to hold a steady value — in USDT's case, about one US dollar. That stability is exactly what makes it appealing where local money is losing value or hard cash is scarce. Bolivia's economy minister, José Gabriel Espinoza, said the government is studying a framework that could let USDT be used for everyday payments, savings and trade, without depending solely on cash or the traditional banking system.

The backdrop matters. For years Bolivia held its currency at a fixed 6.86 bolivianos per dollar, but mounting pressure on its reserves forced the government to abandon that peg earlier this year. A parallel market sprang up where dollars trade at a steep premium, and that gap pushed people toward dollar substitutes like USDT. After lifting a ban on crypto transactions in 2024, the country recorded about $14.8 billion in crypto transaction volume over a single year, according to Chainalysis, and one of its largest banks began offering USDT custody.

Officials are being cautious, and beginners should be too. Espinoza stressed that any rollout would need strong anti-money-laundering safeguards, in part because Bolivia sits on the Financial Action Task Force's "gray list" of countries under increased monitoring. The framework is still under review and has not been adopted.

The honest caveat for a newcomer: a stablecoin is only as trustworthy as the company and reserves behind it, and a government blessing does not make it risk-free. USDT can be a practical tool when a national currency is unstable, but "digital dollar" is a convenience, not a guarantee. This is information, not investment advice.