Arce, who left office in November, will be held in a prison in the capital La Paz and will likely be tried for alleged economic misconduct related to the diversion of funds for projects in Indigenous communities while serving as economy minister under former leader Evo Morales.
A hearing has been scheduled for May 12, 2026.
The investigation into Arce focuses on alleged irregular disbursements from a fund, known as the Indigenous Fund, intended to finance projects for Indigenous communities. Local media, citing investigators, reported earlier this week that evidence presented in the case links Arce to the misappropriation of public funds.
Arce was detained by police on Wednesday and has denied any wrongdoing.
"I am completely innocent of the accusations that are being happily levelled against me for clearly political reasons. The government is looking for scapegoats," Arce said at Friday's hearing.
He told the judge he only attended one of the Fund's meetings "by chance" and was unaware of the proceedings mentioned by the prosecutor during the hearing, which was held virtually.
The judge said that, during his pre-trial detention, Arce will be held separately from those serving their sentences in the La Paz prison, and will be able to request to leave for health reasons when necessary.
His detention comes less than two months after centrist candidate Rodrigo Paz won the October runoff election, ending nearly two decades of dominance by the leftist MAS party that Arce represented. Paz has pledged to tackle corruption within state institutions.
Arce served as president of the South American nation from 2020 to 2025, and was previously economy minister between January and November 2019.
