FINTECH IN BOLIVIA: TYPES, OPERATION, AND CURRENT REGULATION

WHAT ARE FINTECHS AND HOW DO THEY WORK?

Fintechs are entities specialized in offering financial services through advanced technologies. These range from digital payments to virtual asset investments and crowdfunding platforms. In the Plurinational State of Bolivia, fintech companies must be formally established and licensed by the financial regulatory authority, ensuring their compliance with clear rules and effective supervision.

For example, a mobile app that enables small entrepreneurs to receive online payments via QR, instant transfers, or even digital assets can streamline daily operations and reduce dependence on cash.

FINTECH CLASSIFICATION BASED ON SERVICES

Fintechs are grouped according to the financial services they provide using technology. Below are the main types and applications:

BLOCKCHAIN AND DIGITAL ASSET SOLUTIONS

These fintechs use technologies like blockchain to offer secure and transparent services. This includes virtual asset service providers (VASPs), who facilitate exchanges between cryptocurrencies and fiat currencies or manage digital wallets. One example is a platform that tokenizes real estate, allowing investors to purchase digital fractions of physical properties.

DIGITAL PAYMENT FINTECHS

These include mobile payment platforms, electronic wallets, and instant transfer systems. Designed to facilitate both in-person and online payments, they are widely used by merchants and consumers. A common example is the use of QR codes to pay for taxi rides or purchases at local markets.

FINTECH FUNDING PLATFORMS

These platforms connect individuals and businesses with collective financing (crowdfunding) or peer-to-peer lending, linking borrowers directly with investors. For instance, a platform that pools micro-investments to finance rural agricultural projects.

TECHNOLOGICAL SOLUTIONS FOR BUSINESSES VIA FINTECH

These provide services like credit risk analysis using AI, accounting process automation, or financial management tools for small businesses. A software helping restaurants monitor income and control expenses in real time would fall into this category.

FINTECH REGULATION IN BOLIVIA

The regulation of financial technology companies in Bolivia is still developing. It outlines the conditions for incorporation, operation, and supervision. The framework applies to both private and public companies, including those with majority state ownership, as long as they offer technologically innovative services in the financial, securities, or insurance sectors.

Under this framework, fintechs are officially recognized as Financial Technology Companies (Empresas de Tecnología Financiera – ETF). To operate legally, they must incorporate as financial entities and obtain both a formation permit and an operating license from the Financial System Supervisory Authority (ASFI). This process involves meeting specific technical and legal requirements to ensure the legitimacy and stability of their activities.

Additionally, the use of terms that may mislead the public into confusing unauthorized companies with registered ETFs is strictly prohibited.

The types of services ETFs may offer are clearly defined. These include blockchain use, tokenized and virtual assets, and the provision of services as Virtual Asset Service Providers (VASPs). In this role, a company may handle exchange, transfer, custody, or administration of digital assets and participate in public offerings of virtual assets.

ETFs may also operate in areas such as digital payments, crowdfunding platforms, and business tech solutions. It’s important to note that ASFI may expand the categories of allowed services as the sector evolves.

To mitigate risks and promote responsible innovation, ETFs may be required to test their services in a Controlled Testing Environment (Entorno Controlado de Pruebas – ECP). This supervised space allows real-world testing under defined limits, safeguarding the financial system’s integrity.

For services related to insurance, additional regulation and oversight are provided by the Pension and Insurance Supervision Authority (APS), which coordinates with ASFI to ensure comprehensive and specialized oversight.

This regulatory structure aims to foster technological innovation without compromising the financial system’s stability or user rights, aligning fintech development with standards of transparency, security, and institutional accountability.

CONCLUSION

Fintechs represent a key opportunity to modernize access to financial services, boost inclusion, and energize the digital economy. Their operation in Bolivia is subject to a specific regulatory framework designed to balance innovation with user protection, ensuring transparency, legality, and security in all activities.