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The Regulation of Cryptocurrencies in Colombia Advances

  • A bill to regulate cryptocurrencies was presented to the House of Representatives by the Green Party.
  • The South American country is seventh in the world in terms of the development of operations with Bitcoins.
  • The adviser to the president of Colombia considers Bitcoin to be the most brilliant software to have been created so far.

The regulatory wave of cryptocurrencies seems to be advancing in Latin America, shortly after the initiative presented by the United States Congress to regulate the operations of Bitcoin, and following the decision of the president of El Salvador, Nayib Bukele, to make BTC into legal tender in the country.

Representative of the Colombian Green Party, Mauricio Toro, was the one who presented the bill for the “Crypto Asset Exchange Services Offered Through the Exchange Platforms.”

The parliamentarian explained that the initiative seeks to establish a normative and regulatory framework that helps to better define the operations of digital platforms based in the South American country.

Colombia is currently ranked as seventh in the world in terms of the countries that carry out the most operations with Bitcoin and other cryptocurrencies. There are around 687 commercial establishments that accept payment for goods and services in crypto in the country, with BTC being the most popular.

Last year alone, BTC operations exceeded $147 million in Colombia. Some other countries in the continent that have been receptive to the regulation of crypto operations are Mexico, Paraguay and Argentina.

“Colombia Needs It to Attract Crypto Investments”

Toro believes that the time is ripe to pass the legislation. Otherwise, it is predicted that Colombia will lose opportunities for technological innovation, and national and foreign investment. He warns that, should this come to pass, Investors would look to other countries that do have a clear regulatory framework.

“The country cannot continue without regulation [..] we need to guarantee all the actors of the ecosystem a clear floor, with security, that closes the door to black markets and possible fraud,” said the legislator.

He asserted that Colombia cannot afford to “miss the generation of income from the taxes of these companies and enterprises that would be formalized by having a regulation.”

Toro emphasized that, with the cryptocurrency industry, his country would gain more employment, taxation, legal security and protection for investors’ assets.

"Likewise, we guarantee traceability, surveillance, security and market growth,"

he said.

The parliamentarian clarified that the bill does not contradict the regulatory Sandbox promoted by the Financial Superintendency. He noted that both initiatives are critical to the industry and should move forward simultaneously.

Approval of BTC Risky, but Worthwhile

The adviser to the president of Colombia, Jehudi Castro Sierra, recently declared that Bitcoin constitutes “the most brilliant piece of software in history.” He indicated that, despite China’s attacks on miners and the speculative crash that BTC was subsequently subjected to, the cryptocurrency managed to regain its hash rate.

“I approached Bitcoin as a great open source project. After a while, I also became interested in the monetary innovation that it represents and I keep discovering new and incredible things every day,"

Sierra said.

He indicated that Colombia is currently very focused on cryptocurrencies.

"We have an innovative sandbox where we allow exchanges to reach citizens easily and safely."

Regarding the government’s initiative on the regulation of BTC operations, he explained that “the idea is that the information collected in this sandbox has a friendly regulation that encourages innovation and attracts investment.”

Castro Sierra also referred to the adoption of BTC in El Salvador as legal tender, calling the president’s decision a “bold move.” The advisor acknowledges that the approval of BTC has some potential risks, but believes that, at the end of the day, “it will bring new investments.”

On The Flipside

  • Despite the interest in recouping taxes and capturing new investments in BTC and other cryptos, Colombia’s mistrust of digital money persists due to consistent money laundering and other criminal activities.

Why You Should Care?

Sooner or later the governments of Latin America will end up accepting cryptocurrencies as investment assets and financial instruments of exchange. The capital involved is too important to be ignored, particularly after the pandemic crisis.

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    This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed to be financial legal or tax advice. Trading Forex, cryptocurrencies, and CFDs poses a considerable risk of loss

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