Banco Central de Bolivia Reports Record Use of Crypto-Assets Amidst Dollar Scarcity (BCB)
Banco Central de Bolivia (BCB) reported that crypto-asset (most likely mostly USDT) transactions soared from $46.5 million in the first half of 2024 to $294 million in the same period of 2025. Crypto-assets were outlawed in Bolivia until June 2024. but since the ban was lifted, transaction volumes have reached $430 million across more than 10,000 individual operations. This is occurring amid Bolivia’s severe economic crisis, which includes near-zero dollar reserves, 40-year high inflation, fuel shortages, and a currency that has lost half its value on the black market despite an artificially maintained official exchange rate. The central bank noted that these digital payment tools have facilitated access to foreign currency transactions, including remittances and small business payments, benefiting micro and small business owners and families nationwide during the ongoing dollar scarcity crisis. [Read more at the BCB]
If Stablecoins are Money, They Should be Backed by Reserves (RISK)
RISK has made freely available a 2021 article by Charles Kahn and Manmohan Singh that argues that stablecoins pose fundamental challenges to traditional monetary policy because, unlike conventional commercial bank money that must be backed by central bank reserves, stablecoins are backed by high-quality liquid assets (HQLA) and commercial bank deposits. This creates a parallel currency system outside central bank control, potentially reducing its ability to influence money supply through monetary policy operations. The authors suggest that allowing stablecoin issuers access to central bank reserves as stablecoin collateral would be preferable to them resorting to HQLA and commercial bank deposit backing. [Read more at RISK]
What Do DAOs Really Contribute (LSE)
The London School of Economics (LSE) and Political Science Law School published a paper by Edmund Schuster and Kelvin Low that critically examines the claims that Decentralized Autonomous Organizations (DAOs) can revolutionize business by solving the principal-agent problems inherent in traditional corporate structures. The authors argue that DAOs have fundamental flaws that prevent them from being viable replacements for corporations. They identify two main types: “assisted driving” DAOs that merely add blockchain features to traditional corporations (which they call BLINOs – blockchains in name only) offer no meaningful advantages over existing centralized systems, while “Real DAOs” that are truly autonomous face insurmountable legal obstacles due to conflicts between blockchain immutability and the hierarchical nature of legal systems. The paper demonstrates these limitations through numerous examples of DAO failures and attacks, arguing that Real DAOs either cannot effectively interact with the off-chain world due to synchronization problems with legal reality, or must compromise their autonomy to comply with legal requirements, thereby negating their supposed benefits. The authors conclude that DAOs are likely to remain confined to niche applications involving purely on-chain transactions rather than revolutionizing mainstream business organization. [Read more at the SSRN]
