Latin American countries such as Colombia are top havens for bitcoin and cryptocurrencies. Unfortunately, what these countries don’t always have are the right regulatory tactics, but some are looking to change that.
Is Colombia Looking to Change Itself?
In the past, companies like Paxful have done their best to increase the number of bitcoin ATMs present in the country, and for the most part, they’ve been successful. In addition, Colombia has increased its use of altcoins like Ethereum and Dash, two primary competitors to bitcoin, so to say that Colombia has a healthy crypto atmosphere would be correct.
However, what it doesn’t seem to have are the right statutes in place that would allow crypto use to continue appropriately. These statutes would be handled by the Colombian Superintendency of Financial Assets, and the organization has been rather slow to implement the right laws. At press time, the agency does not recognize crypto exchanges as legal trading platforms, which means that any customer that loses their funds through an exchange hack has no one to turn to, and their money is likely gone for good.
The organization recently issued a statement regarding cryptocurrency-related laws in Colombia. It says:
None of the transactional platforms or marketers of ‘virtual currencies’ such as bitcoin are regulated by Colombian law, nor are they subject to the control, surveillance or inspection of this Superintendency. There are no mechanisms to enforce compliance with transactions with ‘virtual currencies,’ which significantly increases the possibility of noncompliance… [Cryptocurrencies] do not constitute a value in terms of Law 964 of 2005. Therefore, they are not part of the infrastructure of the Colombian stock market. They do not constitute a valid investment for the supervised entities, nor are there operators authorized to advise and/or manage operations on them.
Clearly, anyone who uses or stores cryptocurrency in Colombia is taking a big chance. With no governing body regulating crypto activity, the digital asset industry in Colombia is still very much locked within the “wild west” mantra that was once so present four or five years ago.
For the most part, however, this doesn’t seem to be getting in the way. Many acknowledge this and are trying to make a difference to make Colombia’s crypto future a little easier. One such figure is Congressman Mauricio Toro of the Green Alliance Party, which recently introduced a new bill that would clarify present crypto laws and legalize crypto exchanges throughout the nation.
More Regulation Is Needed
In Colombia, the financial apparatus has been overprotected due to [perceived] risks associated with financing terrorism and money laundering; financing illegal groups and drug trafficking. The only way to calm and modernize [this system] and update it according to the challenges of the modern economy is to understand the [Colombian] state and its concerns.