Colombia is one of the 10 countries that uses crypto assets the most in the worldaccording to Chainalysis studies, is also one of the countries with the greatest regulatory advances in the region, carrying out serious initiatives by regulatory entities to understand the market and develop a legal framework for operations with crypto assets. The country’s president, Gustavo Petro, showed his sympathy towards cryptocurrencies and the opportunity they represent for his country. This is how BITPOINT Latam shared this past August with Cointelegraph en Español in its analysis of the evolution of finance in Colombia after the change of government.
After more than a year of the pilot plan of the Financial Superintendence (SFC) through the regulatory sandbox, “the sandbox”, for understanding how the cryptocurrency market works in Colombia, The news of the first draft of an external circular for the regulation of transactions and operations with crypto assets in the country has already been releaseda fact that makes many wonder: what will be the future of these currencies under the government of Gustavo Petro?
Julián Geovo, director of operations of Bitpoint for Latin America, an exchange that together with the electronic wallet MOVii are participating in the SFC pilot, considers that although there is no clear position on the part of the new president, Petro has already spoken on some occasions about this theme, noting that he finds crypto assets a great opportunity for the country, added to the regulatory project left by the current government, it could be the ideal input for crypto regulation in Colombia to become a reality soon.
“There are especially two fronts to highlight in which Petro has expressed his opinion regarding crypto assets in Colombia. The first, that this type of assets is an opportunity for the decentralization of money and lower the dominance of banks, who have a high concentration of the market in Colombia. On the other hand, the president-elect highlighted in an interview a few months ago that crypto assets are already a global trend and that they will need more and more clean sources of energy to operate sustainably, which represents an opportunity for the country to generate this energy through green sources such as solar and wind, in Guajira and Cesar, as well as the hydroelectric plant in the waterfalls of the Colombian mountain ranges. This will allow us to be one of the main sources of clean energy necessary for the global growth of crypto assets in a sustainable way.”, highlighted Geovo.
On August 17, Leonardo Villar announced during the last Banking Convention held in Cartagena, Colombia, that the Banco de la República is studying the issuance of a sovereign digital currency. According to the head of the issuer, this digital version of the Colombian peso would seek to facilitate interoperability between digital wallets and current banks in Colombia. Julián Genovo gave his opinion about it: “Leonardo Villar’s intervention shows the new vision regarding cryptoactives in the highest positions of the country’s institutions and Colombia is not the only country that is carrying out this type of initiative”.
In turn, Genovo highlighted the electronic currencies created in nations such as Brazil and the executive order carried out by the United States, with which the creation of the digital dollar would be studied and the crypto market would be regulated; he also said: “Singapore is studying its own and China is already in its first tests of the Digital Yuan”
He further stated: “Creating a blockchain version of the current currencies of the countries is a great advance in terms of transparency, savings for the issuer, financial inclusion and modernization of the economy of our countries. Our vision for the next few years is that most of the major currencies in the world will create their digital version based on Blockchain. We are seeing the beginning of the era of CBDCs (Central Bank Digital Currencies)”.
An important issue for the Colombian country
It should be remembered that this has been one of the most important issues in the country, after the 2021 United Nations Conference on Climate Change (COP 26), The Colombian Government commits to reduce greenhouse gas emissions by 51% by 2030 and achieve carbon neutrality by 2050. To this end, solar, wind, biomass, hydrogen and geothermal energy generation projects are already being carried out, with the aim of going from having 1,365 MW of installed capacity to 4,500 MW within this generation matrix.
On the other hand, the director of Bitpoint explained what would be the key points that will be resolved in the face of the development of a regulatory framework for the crypto market and that the incoming government should take into account:
consumer protection: The majority of users in Colombia buy and sell crypto assets through ‘Peer to Peer’ (P2P) modalities, either through platforms or physically, with people and companies, mostly informal, that are dedicated to marketing this type of currency . The risk of these modalities is that users are giving personal and financial information to third parties, which puts the privacy and security of customers at risk. He clarified: “In addition, to date there are no controls for this type of operation, which is why users and some companies disguise their economic activities, generating a lack of transparency for both banks and public entities when carrying out their income tax returns.”.
investment promotion: One of the industries that is attracting the most investment in Latin America is the fintech industry, and among a wide variety of categories in the sector, one of the main fronts covered by different startups is that of crypto assets. Likewise, cases such as El Salvador should be taken into account, where there has been a considerable increase in economic activity and foreign direct investment since the Bitcoin law came into force.
Developing: Creating clear legislation fosters confidence in the world to invest, but also gives clarity to local entrepreneurs, who will take advantage of the early phase of the crypto industry to create knowledge and business models that allow the country to position itself as a power in this industry in the medium and long term, which could result in Colombian entrepreneurs being able to export their knowledge and create global companies in the crypto industry from Colombia.
Key use cases for Colombia: On the other hand, its use could promote key issues such as remittances or financial inclusion and the digitalization of public processes based on blockchain technology to improve transparency, reduce corruption and generate confidence in public spending.
The new Government has the opportunity to lead a world market that is expected to continue growing at exponential rates in the coming years. Former president Iván Duque leaves an important advance and is a great starting point for the future of the Colombian crypto industry with projection towards the world.
Strengthening the crypto market will require that the incoming government continue to take a proactive approach so that regulation becomes a reality and that Colombia can develop an industry, which today already leads in the number of users organically, and which has the potential to renew multiple sectors. that will lead the country to the development and globalization of its economy to a greater degree than the current one.
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