Colombian Regulators Propose New Crypto Regulation Bill
Two Colombian regulators have introduced a new bill aimed at regulating cryptocurrency. This proposed legislation features 16 provisions, which include a Virtual Asset Service Provider (VASP) licensing system for crypto firms.
According to the local media outlet El Colombiano, the bill seeks to create a legal framework that enhances user protection and encourages investment in Colombia’s developing crypto industry.
Key Aspects of the Bill
The bill comprises 16 articles addressing various crypto-related issues such as monitoring, marketing regulations, education, crypto taxation, and anti-money laundering/counter-terrorism financing measures (AML/CFT).
Additionally, the proposed licensing system for virtual asset service providers mandates that crypto firms wishing to operate in Colombia apply for VASP licenses. This mirrors similar regulations in places like Hong Kong, Singapore, Canada, and the UAE.
Legislative Background
Senator Gustavo Moreno and House Representative Julián López presented the bill to Congress on March 2, following a previous unsuccessful attempt. Moreno emphasized the urgent need for a regulatory framework to address the existing informal operations of virtual asset companies in Colombia, which generates uncertainty and risks for users.
The absence of regulation has hindered the provision of essential security measures for crypto services, exposing users to potential misuse of assets. “Our bill seeks to establish clear rules of the game to generate a reliable and more attractive crypto ecosystem for investment with guarantees for this emerging industry,” stated Rep. López.
Growing Crypto User Base
Reports indicate that approximately five million Colombians have engaged in cryptocurrency trading, with 2024 witnessing a crypto transaction value of $6.7 billion. However, the unregulated environment has led to instances of scams and pyramid schemes, as well as misuse for money laundering.
The Colombian Financial Superintendent, the nation’s primary financial regulator, has been working on various crypto pilot projects since 2021, but these initiatives have yet to yield a definitive regulatory framework.
Read more: Colombian bank Littio, OpenTrade launch USD accounts on Avalanche
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