Colombian legislators presented a bill to regulate the country’s cryptography sector, El Colombiano reported on March 3.
According to the report, Senator Gustavo Moreno and the representative of the Chamber Julian Lopez submitted the proposed legislation to the Congress on March 3. This effort follows a failed attempt to adopt similar regulations last year.
Lopez would have said:
“This project seeks to have clear rules of the game to generate a reliable and more attractive ecosystem for investment with guarantees for this emerging industry.”
Given this, the bill describes a framework to supervise the activities related to cryptography, covering areas such as market surveillance, asset promotion, education and taxation.
It also includes measures to prevent money laundering and terrorist financing, improve investor protection and promote industry growth.
Meanwhile, a key aspect of the proposal is the introduction of a license system for virtual active service providers (VSP). If it is adopted, this would require crypto service providers to obtain official licenses to operate in Colombia, aligning the regulatory approaches observed in other countries.
The legislators noted that even if the VALPs are not illegal, they operated in an unregulated environment. This lack of surveillance creates uncertainty and exposes users to risks due to the absence of consumer protection mechanisms.
Colombia cryptography market
The reintroduction of the bill highlights the growing role of digital assets in the economy of Colombia. A 2024 report from Chainalysis classified the country among the first five in Latin America for cryptographic transactions.
In addition, estimates suggest that more than five million Colombians actively engage in cryptographic trading, with around $ 6.7 billion in digital assets circulating in 2024.
However, concerns remain concerning fraudulent programs such as Ponzi and pyramid scams and the use of cryptocurrencies for illicit financial activities.
Meanwhile, Colombia has also explored the potential of a digital currency from the Central Bank (CBDC). In 2023, the country’s central bank joined Ripple to test a CBDC solution to improve its local payment systems.
Despite the promising start of the initiative, its current status remains uncertain because Ripple fell from its CBDC efforts.
