Entrepreneurs avoid operating in Colombia due to a lack of regulation of the cryptocurrency sector. The government follows a strategy including blockchains that handle crypto assets.
In recent days, the president of the Colombian Banking and Financial Entities Association (Asobancaria), Santiago Castro, said that the country’s financial sector is currently open to participate in the world of Bitcoin and other cryptocurrencies.
Regarding the regulation of crypto assets and projects for the use of blockchain that the Colombian government is implementing, he said that banking entities operate in a highly regulated sector. “Now we have expectations about the approval of the regulatory sandbox,” he said about the pilot scheme that the Executive recently approved.
Castro recalled that the Bank of the Republic of Colombia has not yet recognized crypto assets, so they cannot yet accept them as currency.
“The Financial Superintendency says that we cannot operate with cryptocurrencies and does not allow the use of our infrastructure to conduct operations with this type of assets,” emphasized the president of Asobancaria.
Mauricio Tovar, from the Colombia Blockchain Foundation, recalled the situation that exchanges have experienced in Colombia due to these limitations and the lack of regulation. “This problem has caused the country to lose many opportunities for investment, innovation and jobs,” he said.
According to Tovar, although Colombia is one of the 5 countries in Latin America with the highest number of transactions with crypto assets, many platforms have decided to operate in other places in the region.
Asobancaria and Ideas to Regulate Bitcoin Exchanges
Vice president of Asobancaria, José Manuel Gómez, reaffirms that banks are open to the entry of new competitors. Among these, cryptocurrency companies could complement and strengthen the system, as well as offer new services. However, the manager says that “this entry must follow a regulation.”
According to Gómez, they could take South Korea or Japan as a reference, since their rules seem very clear, particularly in the handling of Know Your Customer (KYC) measures and anti-money laundering regulations. That leads him to think that the draft regulation, currently under review in Colombia, should establish minimum requirements for exchanges to operate.
In addition to the above ideas, the manager says that they should make adjustments to the regulation on exchange platforms that they adopt. Besides, he believes that the current bill should establish tax regulations. It concludes that the ecosystem needs strong regulation to protect the consumer.
Concerning the closure of bank accounts for projects with cryptocurrencies, Gómez said that it is not a specific policy against these companies. “These closings only respond to risk assessment, based on which we can decide to suspend.”
Colombian Government Is Already Thinking about Crypto Assets
Considering the above approaches, the presidential advisor, Jehudi Castro, spoke about the government strategy on blockchain and crypto assets. In that sense, he noted that the government is focusing on public blockchains that handle crypto assets, specifically Ethereum.
The advisor states that “bankarization has become an important issue”, since the situation that COVID-19 has generated made clear the importance of having new forms of digital payments available to all audiences.
Castro believes that the controlled space that will open with the sandbox will allow having a new approach to the regulation process of crypto assets and opening the doors for their official use. “However, it is also possible to conclude that regulation is not necessary,” according to Castro.
Álvaro Delgado, from MinTIC, said that the Colombian government is interested in providing higher levels of connectivity to Colombian households. With this, they plan to give more comprehensive momentum to the use of blockchain and the development of the digital economy of the South American country.
By Alexander Salazar
