BOARD OF DIRECTORS

BOARD RESOLUTION NO. 082/2024

SUBJECT: FINANCIAL ENTITIES MANAGEMENT AND ECONOMIC POLICY ADVISORY – REVOKE BOARD RESOLUTION NO. 144/2020 OF DECEMBER 15, 2020.

VIEWED:

• The Political Constitution of the State (CPE) of February 7, 2009.
• Law No. 901 of November 28, 1986.
• Law No. 1670 of October 31, 1995 of the Central Bank of Bolivia (BCB) and its modifications.
• Law No. 4072 of July 27, 2009.
• Law No. 393 of August 21, 2013.
• Law No. 1543 of November 22, 2023.
• Supreme Decree No. 4904 of April 5, 2023.
• International Standards on Combating Money Laundering, the Financing of Terrorism and the Financing of Proliferation of Weapons of Mass Destruction, issued by the Financial Action Task Force (FATF).
• The Mutual Evaluation Report of the Plurinational State of Bolivia, issued by the Financial Action Task Force of Latin America (GAFILAT), published in January 2024.
• Board Resolution No. 144/2020 of December 15, 2020, approved by the Board of Directors of the BCB.
• The Statute of the BCB, approved by Board Resolution No. 095/2022 of October 6, 2022.

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• The technical report BCB-GEF-SSPSF-DVSP-INF-2024-25 of June 24, 2024, issued by the Financial Entities Management (GEF), the Economic Policy Advisory (APEC) and the Compliance and Prevention Department – UIF (DCP-UIF).
• The legal report BCB-GAL-SANO-DLBCI-INF-2024-240 of June 24, 2024, issued by the Legal Affairs Management (GAL).

CONSIDERING:

That Articles 327 and 328 of the Political Constitution of the State establish that the BCB is a public law institution, with legal personality, its function being to maintain the stability of the internal purchasing power of the currency to contribute to economic and social development, with the powers to determine and execute monetary policy, execute exchange rate policy, regulate the payment system, authorize the issuance of currency and administer international reserves.

That Article 1 of Law No. 901 provides for the creation of the Boliviano as the new unit of the monetary system of the Republic (now Plurinational State of Bolivia), through banknotes and coins that the BCB will issue and circulate with the quality of legal and mandatory tender, starting from January 1, 1987.

That Articles 3 and 6 of Law No. 901 establish that the BCB is the sole issuer of Boliviano banknotes and coins of legal and mandatory tender, placed in circulation by the Issuing Entity, shall have unlimited discharge power for all kinds of public and private obligations.

That Articles 1, 2, 3 and 4 of Law No. 1670 provide that the BCB is the sole monetary and exchange authority of the country, with administrative, technical and financial competence and normative powers, specialized of general application, whose object is to seek the stability of the internal purchasing power of the national currency, formulating policies of general application in monetary, exchange and payment system matters for the fulfillment of its object, taking into account the Government's policy at the time of formulating its policies.

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That Articles 10 and 11 of Law No. 1670 establish that the BCB will exercise exclusively and inalienably the function of issuing the monetary unit of Bolivia, which is the Boliviano in the form of banknotes and metallic coins, and said banknotes and coins issued by the BCB are means of payment of legal tender throughout the territory of the Plurinational State of Bolivia, with unlimited discharge power.

That Law No. 4072 approves the Memorandum of Understanding between the Governments of the States of the South American Financial Action Task Force (GAFISUD) against Money Laundering, signed in the city of Cartagena de Indias on the 8th day of the month of December of the year 2000.

That paragraph III of Article 8 of Law No. 393 establishes that the Financial System Supervision Authority (ASFI) will issue specific regulation and supervise its compliance within the framework of the regulations issued by the BCB, in the scope of the payment system.

That Additional Provision Fourth of Law No. 1543 of November 22, 2023 incorporates Paragraph IV into Article 19 of Law No. 393 of August 21, 2013, on Financial Services; with the following text: “IV. The Executive Branch through Supreme Decree will regulate the constitution and functioning of companies specialized in providing services with technological innovation in the field of financial services, securities market and insurance, whose denomination will be Financial Technology Companies – ETF”.

That Supreme Decree No. 4904, in its Article 10, subsections a), b) and s) establishes that the Financial Investigations Unit (UIF) has among its attributes the power to regulate the regime for the prevention and fight against the Laundering of Illicit Gains, Financing of Terrorism and Financing of the Proliferation of Weapons of Mass Destruction (LGI/FT and FPADM); to issue instructions, information requests, recommendations and others to Obligated Subjects in the scope of its competence; as well as to exercise supervision in matters of laundering of illicit gains and financing of terrorism of those Obligated Subjects that are not under the supervision of an entity that exercises such attribution specifically.

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That within the Recommendations of the Financial Action Task Force (FATF) – International Standards on Combating Money Laundering, the Financing of Terrorism and the Proliferation of Weapons of Mass Destruction, Virtual Assets (VA) are defined as a digital representation of value that can be traded or transferred digitally and can be used for payments or investments. VAs do not include digital representations of fiat currency, securities and other financial assets that are already covered in other parts of the FATF Recommendations.

That the Mutual Evaluation Report of the Plurinational State of Bolivia, published in January 2024 by the Financial Action Task Force of Latin America (GAFILAT), determined among its findings that operations with VAs and the functioning of Virtual Asset Service Providers (VASP), although with low materiality, occur in the country. Therefore, it recommended considering the regulation of VASPs in accordance with the public policy defined in the Bolivian context.

That items 1), 2) and 13) of Article 10 of the Statute of the BCB establish that the Issuing Entity has the competence to issue necessary norms for it to fulfill its functions, competences and powers, define the BCB's policies, specialized regulations of general application and internal norms, establish administrative, operational and financial strategies, approving its short and medium-term programs; as well as approve the norms for the functioning of the payment system.

That the Technical Report BCB-GEF-SSPSF-DVSP-INF-2024-25 from GEF, APEC and DCP-UIF concludes that, the BCB within the framework of its policies, has promoted the modernization of the national payment system and the development of payment infrastructure, facilitating the adoption of technological innovations and new payment schemes, which contribute to strengthening financial and commercial activities. Likewise, the context of the current regulatory framework facilitates the issuance of new regulation in the financial sector and for the prevention and fight against LGI/FT and FPADM, for the operation of VAs.

That the aforementioned technical report warns that the only legal tender currency in the country is the Boliviano and that the risks inherent to the use and commercialization of VAs are assumed by the users; in that context and being a technically viable proposal, it recommends to the BCB Board of Directors to revoke B.R. No. 144/2020 of December 15, 2020.

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That the legal report BCB-GAL-SANO-DLBCI-INF-2024-240 from GAL concludes that the proposal made through technical report BCB-GEF-SSPSF-DVSP-INF-2024-25 is framed within the current legal order. Likewise, it points out that institutions and entities of supervision and control, with competence regarding financial entities and in matters of prevention and fight against LGI/FT and FPADM, within the framework of their attributes and functions, are empowered to issue the corresponding specific regulation and regulation; consequently, it recommends to the Board of Directors to revoke Board Resolution No. 144/2020 of December 15, 2020.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

Article 1.- Revoke Board Resolution No. 144/2020 of December 15, 2020.

Article 2.- This Resolution will enter into force from its publication.

Article 3.- The BCB will include in its Economic and Financial Education Plan conceptual aspects and the risks associated with operations with Virtual Assets.

Article 4.- The General Management is charged with communicating this Resolution to the pertinent instances.

La Paz, June 25, 2024

SIGNED. ROGER EDWIN ROJAS ULO, Oscar Ferrufino Morro, Gabriel Herbas Camacho, Gumercindo Héctor Pino Guzmán, Diego Alejandro Pérez Cueto Eulert.