Board Resolution No. 044/2014

BOARD RESOLUTION NO. 044/2014

SUBJECT: FINANCIAL ENTITIES MANAGEMENT — PROHIBITION OF THE USE OF UNREGULATED CURRENCIES AND MONETARY DENOMINATIONS IN THE NATIONAL PAYMENTS SYSTEM.

HAVING SEEN:

The Political Constitution of the State.

Law No. 1670 of October 31, 1995 of the Central Bank of Bolivia (BCB).

Law No. 393 of August 21, 2013, on Financial Services.

The Statute of the BCB approved by Board Resolution No. 128/2005 of October 21, 2005 and subsequent modifications.

The High-Value Payments System Regulations, approved by Board Resolution No. 131/2009 of October 27, 2009.

The Payment Services Regulations approved by Board Resolution No. 121/2011 of September 27, 2011, modified by Board Resolutions No. 59/2012 of May 22, 2012 and No. 100/2013 of July 30, 2013.

The Electronic Payment Instruments Regulations approved by Board Resolution No. 126/2011 of October 4, 2011 and modified by Board Resolutions No. 25/2012, 60/2012, and 22/2013 of February 23, 2012, May 22, 2012, and March 5, 2013, respectively.

The Regulations for the Transfer of International Remittances approved by Board Resolution No. 071/2012 of June 19, 2012 and modified by Board Resolution No. 154/2012 of August 28, 2012.

The Report from the Financial Entities Management BCB-GEF-SSPSF-DVSP-INF-2014-35 of April 30, 2014.

The Report from the Legal Affairs Management BCB-GAL-SANO-INF-2014-149 of May 6, 2014.

CONSIDERING:

That the Political Constitution of the State establishes in Article 328 that it is the responsibility of the BCB, in coordination with the economic policy determined by the Executive Branch, in addition to those indicated by Law, to regulate the payments system.

That pursuant to Article 331 of the Political Constitution of the State, financial intermediation activities, the provision of financial services, and any other activity related to the handling, utilization, and investment of savings are of public interest and can only be exercised with prior authorization from the State, in accordance with the Law.

That Law No. 1670 provides in its Articles 2, 3, and 30 that the BCB aims to ensure the stability of the internal purchasing power of the national currency, for which it formulates general policies in monetary and payments system matters, subject to its regulatory competence, all financial intermediation entities and financial services authorized by the Superintendence of Banks and Financial Entities, currently the Financial System Supervisory Authority (ASFI).

That Law No. 393 in Article 124 establishes that operations carried out within the framework of services provided by financial entities may be conducted through electronic means, which must necessarily comply with security measures that guarantee integrity, confidentiality, authentication, and non-repudiation. Furthermore, in item IV of this article, it states that the Financial System Supervisory Authority and the BCB, according to their respective competencies, will issue regulations establishing the procedure and security norms for operations, as well as the minimum requirements that entities must meet to conduct electronic banking, telephone banking, and mobile device activities.

That the High-Value Payments System Regulations define in Article 32 that payment orders shall be registered in the following monetary denominations: a) National Currency (NC), b) Foreign Currency (FC) only United States Dollars, c) National Currency with value maintenance relative to the Housing Development Unit (NC-HDU), and d) National Currency with value maintenance relative to the United States Dollar (NC-USD).

That the Electronic Payment Instruments Regulations states in Article 5, item a), that funds constituted in accounts supporting mobile wallet payments (payment accounts) shall be denominated exclusively in national currency.

That the use of virtual currencies such as Bitcoin, Namecoin, Tonal Bitcoin, IxCoin, Devcoin, Freicoin, 10coin, Liquidcoin, Peercoin, Quark, Primecoin, Feathercoin, and others, which do not belong to any state, country, or economic zone, has been detected in some countries; consequently, their use and issuance are not regulated, potentially causing losses to their holders.

That the Financial Entities Management, through Report BCB-GEF-SSPSF-DVSP-INF-2014-35, evaluates the current regulations governing the national payments system and the use of other currencies or monetary denominations not authorized by the BCB, and recommends prohibiting the use of currencies not issued or regulated by states, countries, or economic zones, and other monetary denominations not authorized by the BCB within the national payments system.

That the Legal Affairs Management, through Report BCB-GAL-SANO-INF-2014-149, states that it is pertinent for the BCB, in its capacity as the sole monetary and exchange authority of the country, with sufficient powers to issue specialized general application regulations, to prohibit the use of currencies and monetary denominations that are not regulated within the national payments system, concluding that the prohibition is legally appropriate, and that it is the competence of the BCB Board to consider its approval.

That the BCB Board, in its capacity as the highest authority of the institution, is responsible for defining policies, specialized general application regulations, and internal norms, and is empowered to issue norms and adopt general decisions necessary for the fulfillment of the functions, competencies, and powers assigned by Law to the Issuing Entity.

THEREFORE,

THE BOARD OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

Article 1.- From this date, the use of currencies not issued or regulated by states, countries, or economic zones, and electronic payment orders in currencies and monetary denominations not authorized by the BCB within the national payments system, is prohibited.

Article 2.- The Presidency and General Management are tasked with the execution and compliance of this Resolution.

La Paz, May 6, 2014

Abregu Perez Alandia Alvaro Rodriguez Vojas Rafael Boyonellez Reynaldo Yujra Segales