FinTech companies currently generate more than 9,000 direct jobs in the South American country. The cryptocurrency ecosystem seeks to consolidate with the regulatory sandbox that the authorities approved.
Companies that are dedicated to digital credits and payments dominate the FinTech industry in Colombia by almost 60%. The most recent Fintank 2020 report on the sector indicates that 322 companies that focus on financial technologies make life in the country.
The areas that it covers are digital credit and payments, business finance, wealthtech, regtech, cryptocurrencies, blockchain solutions, crowdfunding, insurtech, and neobanks. The report states that 94% of the companies are SMEs, that is, small and medium-sized enterprises.
The Colombia FinTech business association supported the research, which highlights the constant growth of the sector in the last four years. The number of jobs that have emerged demonstrates this. While there were around 2,162 direct jobs related to FinTech in 2017, the number reached 9,308 workers in 2020.
“FinTech solutions have proven to be fundamental for the financial inclusion of individuals, independent workers, micro-establishments, companies, and businesses in general. They are here to stay and revolutionize financial services,” according to the report by Juliana Carmona, Director of Operations at Colombia FinTech.
Bitcoin and Other Cryptocurrencies in Colombia
Regarding the field of cryptocurrencies or blockchains, the document notes that 4.6% of the 322 FinTech companies are related to Bitcoin. The above suggests that around 15 Bitcoin companies remain active in the South American country’s market.
Although the analysis does not directly mention startups, those that are related to cryptocurrencies include various services. Among them are platforms for the exchange of crypto assets, means of payment, companies that develop solutions with blockchains, and companies that offer support for smart contracts in the finance sector.
The report states that the Bitcoin companies affiliated with Colombia FinTech generate 2% of a total of 9,308 jobs. In other words, the 15 companies that connect with crypto assets provide direct jobs to 186 people.
Colombian authorities already approved the installation of a regulatory sandbox for FinTech and cryptocurrencies in 2020. This could contribute to increasing the numbers significantly in the coming years. The country authorized 9 partnerships for conducting tests between banks and Bitcoin exchanges in January. The pilot plan to evaluate transactions with cryptocurrencies will begin in March.
Those associations were as follows: Bancolombia with Gemini, Davivienda and Powwi with Binance, Banco de Bogotá with Bitso and Buda, Coltefinanciera with Obsidiam, Coink with Banexcoin, and Movii with Panda and Bitpoint.
Local banks will also be able to evaluate transactions that relate to Bitcoin. Regulators seek to obtain evidence to create a legal framework that is based on “experience, data, and knowledge.”
The authorities of Colombia had held a strong position against the pioneering cryptocurrency for years, but they are now easing it. This “truce” with cryptocurrencies that the country is now trying to establish is already way ahead when it comes to blockchains.
By Alexander Salazar