COLOMBIA

The bill regulating the use of cryptocoins has been withdrawn by the Third Committee of the Senate after a public hearing where it became clear that the text was inadequate for its purpose. The text defines cryptoactives as digital assets used as a means of exchange or payment for goods and services, as a store of value, and as a unit of account. It also establishes that cryptoasset exchange operators must be registered on Colombian territory or operate as subsidiaries of foreign companies, and must have an “efficient” security system certified by the Ministry of Information Technology and Communications (MinTIC) to prevent cybercrime. Presented in May by Senator Horacio José Serpa (Partido Liberal – ally of the ruling party), the bill will be reformulated and represented in the next legislature taking office on July 20.

The hearing was attended by government officials, business representatives and fintech experts who agreed that the regulations were insufficient to regulate cryptocoin exchange platforms and the initiative was withdrawn. The use of cryptocurrencies in Colombia has increased dramatically, reaching annual growth rates of 47.1% between 2014 and 2017. Senator Luis Eduardo Diaz Granados (Cambio RadicalRadical Change – ally of the ruling party) said that “we can build a bill to include the needs of the sector which will not be a barrier to the development of this activity in Colombia.”

Cesar Reyes from the Superintendence of Finance made it clear that although there is no norm against cryptocurrencies, the entity should exercise prudence in managing the area, as cryptoassets often involve money laundering and terrorism financing. However, Alberto Guada, from the Bank of the Republic, countered that the current text of the bill is inappropriate as “there is no consensus among national authorities regarding the regulation of cryptoassets.”