Colombia Opens Up to the World of Cryptocurrencies

The board of the Banking Association of Colombia said that the cryptocurrencies sector could strengthen the country’s financial system in as much as they are under a regulatory model that allows them to control them. 

The Ministry of Finance and Public Credit of Colombia approved the Sandbox decree on September 14. It aims to evaluate the operating parameters of cryptocurrency exchanges and monitor their activity within this ecosystem.

Various academic entities, trade unions, and the National Government analyzed the country’s panorama of crypto assets in a digital debate. They discussed cryptocurrencies and blockchain. 

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Sector regularization standards

Jose Manuel Gomez, the vice president of Asobancaria, Colombian Banking, and Financial Entities Association, reiterated that banks are open to new competitors’ entry. Cryptocurrency companies could offer new services and strengthen the system. But this entry needs regulation, the executive said.

Santiago Castro, the president of Asobancaria, stated that interest in participating in the world of bitcoin and cryptocurrencies arose in the country’s financial sector.

Despite good disposition, Castro said that banking entities operate in a highly regulated sector. For this reason, they must comply, first of all, with the existing norms and laws. However, now they are waiting for Regulatory Sandbox’s approval to regulate the exchange of crypto assets.

Mauricio Tovar, president of the Colombia Blockchain Foundation, mentioned the difficulties of exchange houses to open accounts and work with banks. According to him, this problem has caused the country to lose many investment opportunities, innovation, and jobs. 

Mauricio Tovar added that Colombia is among the five countries in Latin America with the highest number of transactions with crypto assets. However, many platforms decide to operate in other places in the region. Venezuela has a more significant number of transactions, but entrepreneurs see Colombia with greater interest due to Venezuela’s difficulties. However, the regulatory uncertainty in Colombia causes them to go to other places, such as Argentina.

Asobancaria raises concepts for common bitcoin exchanges

Gomez maintained that the regulation must be strong. Moreover, it could be taken as a reference, specifically to South Korea or Japan, where the established rules are very clear. 

The regulation project currently under review in Colombia should establish minimum requirements for exchanges to operate.

The vice president pointed out that a minimum capital, internal management systems, operational security, accounting management, and segregating assets should be required. This contains the definition of a corporate model and standards for the management of public resources. FATF recommendations on information transparency should be taken into account. The State should also study the entry and exit of money, grant licenses, and have powers of intervention.