The partnership between Movii and Bitpoint has completed operations with cryptocurrencies for USD 320 million. Eight of the nine companies in the pilot plan are awaiting approval to begin their tests.
In September 2020, the Government of Colombia announced that transactions with cryptocurrencies between Bitcoin (BTC) exchanges and local banks would be possible. One year later, financial institutions and cryptocurrency platforms can sustain partnerships and operate without conflicts, unlike in the past.
The regulatory sandbox for the financial technology (FinTech) sector started, integrating a pilot study with cryptocurrencies. The objective is to allow the financial system to test cash-in and cash-out transactions with crypto assets.
An entity supervised by the Financial Superintendence (Superfinanciera) must accompany the companies that offer services with cryptocurrencies in Colombia. In 2020, exchanges wanting to participate in the pilot plan had to submit several requirements to the regulatory body. They had to make partnerships with Colombian financial institutions.
Only 9 of the 14 proposals met all the requirements: Banco de Bogotá with Bitso and Buda, Bancolombia with Gemini, Davivienda and Powwi with Binance, Banco de Bogotá with Buda, Coltefinanciera with Obsidiam, Coink with Banexcoin, and Movii with Panda and Bitpoint.
The Colombian Financial System Has Changed Its View on Bitcoin and Other Cryptocurrencies
The pilot plan will integrate other financial entities such as the Banco de la República and the Superintendence of Companies. Financial superintendent Jorge Castaño Gutiérrez said that the analysis of the results would begin at the end of that stage. Then, it will run until March 2022, when there will be a complete evaluation and definitive outcomes on the viability of the mechanism.
Exchanges and banks can now make partnerships while the Colombian financial system has changed its view on cryptocurrencies. In this way, the latter leaves behind the blockade that exchanges like Buda suffered in the past.
The Chilean company faced problems with Colombian banking in 2017, one year after starting operations in Colombia. Davivienda closed its account without prior notice, arguing that the Financial Superintendence had taken the measure.
Towards the Regulation of Bitcoin and Other Cryptocurrencies in Colombia
Colombian exchanges and banks are conducting a pilot plan with crypto assets. Buda’s country manager Alejandro Beltrán hopes controlled operations will help the industry to have a regulatory framework soon.
Among the objectives the large pilot plan has achieved, the manager talked about the participating cryptocurrency service operators. He said they implement or operate risk management systems following the Financial Action Task Force (FATF) standards.
The executive explained that exchanges must protect consumer rights and ensure addressing user complaints. He added that operations between banks and those platforms must keep records of the terms and conditions of the partnership. Likewise, they must integrate the cash-in and cash-out system with banking entities.
Beltrán stated that the pilot plan would allow replicating the good practices of the financial system in the field of crypto assets. However, Mauricio Toro warned the partnership between banks and exchanges might hide an undertone since the former seems to control everything. He expressed that the banking sector wants to bank a system contrary to traditional banking.
By Alexander Salazar
