Colombia Senators Launch Fresh Bid to Regulate Crypto
Senators in Colombia want to make another attempt to regulate the Latin American nation’s crypto industry.
Per the media outlet El Colombiano, Senator Gustavo Moreno and Congress Representative Julián López have rolled out a bill seeking to create a legal framework that “protects” the country’s crypto users.
Colombia: Crypto Regulations ‘Urgently Needed,’ Say Lawmakers
Moreno noted that the lack of regulation means that crypto exchanges and other firms operate in a rules-free space that “generates uncertainty and risk for customers.”
The Senator added that the “lack of regulation” means there are no “protection mechanisms for consumers.”
Moreno added that Colombia does not have any “control to prevent the misuse of crypto assets.”
Blockchain analysts claim that over five million Colombians now use crypto. They say that during 2024, citizens and residents of the country transacted some $6.7 billion worth of tokens.
But critics claim that adoption has been soured by a rise in crypto scams and crypto-related pyramid schemes.
Others claim that some Colombians are using the largely unregulated crypto industry to launder illicit funds.
The nation’s top financial regulator, the Superintendencia Financiera de Colombia (lit: Colombian Financial Superintendence), has been working on crypto-related pilots since 2021.
However, the same media outlet noted that the Superintendencia’s pilots have not yet produced a “specific regulatory framework.”
Such a framework would allow the Colombian crypto sector to “integrate with the national financial system,” the outlet wrote.
Regulatory ‘Framework’ Bill
The bill contains 16 clauses that cover monitoring, rules on marketing, education, crypto tax, and anti-money laundering and counter-terrorist financing measures (AML/CFT).
The lawmakers say that by “protecting users,” the law could also “encourage [crypto] investment” in the long term.
“Colombia has fallen behind the rest of the world […]. While other countries are moving forward, [the industry here] remains unregulated. Our bill seeks to establish clear rules of the game. We want to generate a reliable and more attractive ecosystem for investment with built-in guarantees for this emerging industry.”
Colombian lawmaker Julián López
VASP Operating Permit System
The bill seeks to introduce a licensing system for crypto operators, who would need to register as Virtual Asset Service Providers (VASPs).
In other nations, VASP licensing systems are usually designed to force crypto exchanges and wallet firms to comply with AML/CFT protocols.
The media outlet quoted the financial analyst Gregorio Gandini as stating that it was “important to regulate cryptocurrencies” because “they are becoming increasingly popular” in Colombia. He added:
“If crypto is not regulated, [Colombians] will adopt them in an irregular manner.”
However, the Colombian crypto investor Daniel Aguilar was quoted as stating that while it was important to provide a “safe framework” where firms could “grow and consolidate,” it was important “not to kill innovation with overly strict rules.” Aguilar said:
“If regulation is too rigid, crypto companies and entrepreneurs could be forced to operate from other countries that have more flexible regulations. We need a legal framework that protects users without stifling the growth of the sector.”
The investor also said that it was “important that crypto assets are taxed reasonably.” Aguilar said lawmakers should avoid “creating tax burdens that discourage” crypto adoption in Colombia.