Colombia is taking steps to regulate its cryptocurrency sector, with lawmakers introducing a new bill aimed at providing clear rules for the industry. The proposed legislation, submitted by Senator Gustavo Moreno and House Representative Julian Lopez, seeks to create a reliable and attractive ecosystem for crypto investment in the country.
The bill outlines a comprehensive framework for overseeing crypto-related activities, including market surveillance, asset promotion, education, and taxation. It also includes measures to prevent money laundering, terrorist financing, enhance investor protection, and foster the industry’s growth.
A key aspect of the proposal is the introduction of a licensing system for Virtual Asset Service Providers (VASPs). This would require crypto service providers to obtain official licenses to operate in Colombia, aligning with regulatory approaches seen in other countries. Currently, VASPs operate in an unregulated environment, leading to uncertainty and risks for users due to the lack of consumer protection mechanisms.
Colombia’s crypto market has been steadily growing, with the country ranking among the top five in Latin America for crypto transactions. Estimates suggest that over five million Colombians are actively engaged in crypto trading, with approximately $6.7 billion worth of digital assets circulating in 2024.
Despite the growth of the crypto sector, concerns remain over fraudulent schemes and the use of cryptocurrencies for illicit activities. To address these issues, Colombia has also explored the potential of a central bank digital currency (CBDC). In 2023, the country’s central bank partnered with Ripple to test a CBDC solution to enhance local payment systems. However, the current status of this initiative is uncertain as Ripple has scaled back its CBDC efforts.
Overall, the introduction of this new bill reflects Colombia’s commitment to creating a secure and regulated environment for the crypto industry to thrive. With clear rules and oversight in place, the country aims to attract more investments and promote responsible crypto trading practices.