WMARANON

Green Light for Fintech

Recently, Supreme Decree No. 5384 was approved, establishing a regulatory framework for the creation and operation of technology companies that offer financial services, known as Fintech, in Bolivia. Under this regulation, all Fintech companies—whether public, private, or mixed—must register as financial entities and obtain both authorization for incorporation and an operating license. This will allow them to operate in various areas, such as blockchain-based technological solutions, payment services, financing platforms, the use of digital currencies, and other innovative services in the fields of securities and insurance.

The term “Fintech” comes from the combination of the words “finance” and “technology” and refers to the use of technological tools to improve or automate financial services. This includes everything from digital banks without physical branches (neobanks), online payment systems, peer-to-peer lending, digital financial advisors, digital insurance, to services related to cryptocurrencies and financial regulation.

Globally, Fintech companies have transformed the way individuals and businesses access financial services. For example, Nubank, a digital bank founded in 2013, already has more than 114 million users in Brazil, Mexico, and Colombia, offering commission-free accounts and cards through mobile phones. Stripe, which provides digital payment solutions in 46 countries, facilitates international payments for businesses of all sizes. Ant Group, the owner of Alipay, operates the world’s largest mobile payment platform, with more than 1.3 billion users and 80 million affiliated merchants.

Bolivia is not indifferent to the Fintech sector. It is estimated that more than 40 companies are already active, and among the international players operating in the country, we can highlight Binance, the largest marketplace for buying and selling cryptocurrencies; AirTM, which allows the creation of virtual dollar accounts and the conversion of cryptocurrencies into local currency; Meru, a digital bank that operates with stable virtual currencies and offers virtual cards; and RedotPay, which enables payments with cryptocurrencies through digital cards at more than 130 million merchants worldwide.

The lack of clear regulation has hindered companies such as Kraken, Revolut, Coinbase, Wise, and many others from operating properly in Bolivia, also affecting national startups that require clear rules to establish themselves and operate securely.

The approval of this regulatory framework represents a significant step forward. On the one hand, it provides legal certainty for foreign Fintech companies to enter the country and offer their services; on the other hand, it creates favorable conditions for domestic Fintech companies to emerge and grow under clear rules. The general population stands to benefit the most, as it will be able to securely access modern and efficient services, such as foreign currency exchange, sending and receiving remittances with low fees, the use of cryptocurrencies, and other improved financial services, all within a system that protects their rights as consumers.

Author: Walter Marañon Quiñones