Colombia plans crypto regulations to curb risks and attract investment

Colombian lawmakers person introduced a measure to modulate the country’s crypto sector, El Colombiano reported connected March 3.

According to the report, Senator Gustavo Moreno and House Representative Julian Lopez submitted the projected authorities to Congress connected March 3. This effort follows a failed effort to walk akin regulations last year.

Lopez reportedly said:

“This task seeks to person wide rules of the crippled to make a reliable and much charismatic ecosystem for concern with guarantees for this emerging industry.”

Considering this, the measure outlines a model for overseeing crypto-related activities, covering areas specified arsenic marketplace surveillance, plus promotion, education, and taxation.

It besides includes measures to forestall wealth laundering and violent financing, heighten capitalist protection, and foster the industry’s growth.

Meanwhile, a cardinal facet of the connection is the instauration of a licensing strategy for Virtual Asset Service Providers (VASPs). If enacted, this would necessitate crypto work providers to get authoritative licenses to run successful Colombia, aligning with regulatory approaches seen successful different countries.

The lawmakers noted that portion VASPs are not illegal, they person been functioning successful an unregulated environment. This deficiency of oversight creates uncertainty and exposes users to risks owed to the lack of user extortion mechanisms.

Colombia’s crypto market

The bill’s reintroduction highlights the increasing relation of integer assets successful Colombia’s economy. A 2024 report from Chainalysis ranked the state among the apical 5 successful Latin America for crypto transactions.

Additionally, estimates suggest that much than 5 cardinal Colombians actively prosecute successful crypto trading, with astir $6.7 cardinal worthy of integer assets circulating successful 2024.

However, concerns stay implicit fraudulent schemes specified arsenic Ponzi and pyramid scams and the usage of cryptocurrencies for illicit fiscal activities.

Meanwhile, Colombia has besides explored the imaginable of a cardinal slope integer currency (CBDC). In 2023, the country’s cardinal slope partnered with Ripple to trial a CBDC solution to amended its section outgo systems.

Despite the initiative’s promising start, its existent presumption remains uncertain arsenic Ripple has stepped backmost from its CBDC efforts.

The station Colombia plans crypto regulations to curb risks and pull investment appeared archetypal connected CryptoSlate.