Chinese Yuan Adopted by Bolivian Central Bank for International Settlements

The Bolivian Central Bank is adopting the Chinese yuan for certain international settlements. Bolivia's Economy Minister Marcelo Montenegro revealed that the bank was already using yuan to settle transactions, even without Chinese banks in Bolivia.

Nevertheless, Montenegro explained that having a branch of a Chinese bank in Bolivia would speed up the currency’s adoption process for these transactions.

He said, “It is clear that sometimes it is not necessary to have a bank to carry out operations, but obviously having a Chinese bank or one close to the region can also facilitate operations much more smoothly.”

Both China and Bolivia are working towards bringing Chinese banks into Bolivia as intermediaries to facilitate transactions, as stated by China's Ambassador to Bolivia, Huang Yazhong.

Bolivia's President, Luis Alberto Arce, has openly advocated for de-dollarization in Latin America and fostering partnerships in the region, including BRICS countries such as China.

After attending the Common South Market Summit, he declared, “Our region is seriously affected by the restrictions imposed by the northern financial system, which limits financing options, making it necessary to reduce dependence on the U.S. dollar and diversify our economic relations.”

Bolivia is facing a shortage of U.S. dollars. To mitigate this, Bolivia's government approved a law in May that permits the sale of up to half of its gold reserves for dollars on international markets to avoid a similar liquidity squeeze.

Bolivia is following the footsteps of Argentina and Brazil, both of which have shown signs of embracing the Chinese yuan in their financial systems. In March, Brazil signed an agreement with China to conduct bilateral trade using their respective national currencies. Argentina also integrated the Chinese yuan into its system, allowing importers to settle transactions with China using the Chinese yuan.

(Source: Bitcoin.com)