Colombian Government launches crypto transaction trial

Colombia has been working towards establishing its foundation in the cryptocurrency industry

On Tuesday, Colombia approved a pilot program that invites companies to test crypto transactions. The program will run until December 31 within the regulatory sandbox, recently passed by the country’s financial watchdog, the Ministry of Finance and Public Credit, on September 14.

Jorge Castaño, the head of Colombia’s Financial Superintendence (SFC), stated that companies planning on running a trial of crypto transactions must submit their applications by the end of the year since the pilot will start running in 2021.

“Applications that meet the general requirements will be evaluated by a Committee made up of the Presidency of the Republic, the SFC, the Superintendency of Societies, the UIAF and the representation of the academy, taking into account criteria of innovation, inclusion, reliability, and transparency,” the announcement read.

“In this controlled space [the sandbox], cash-in operations (deposit of resources) and cash-out (withdrawal of resources) will be tested in banking financial products on behalf of crypto-asset exchange platforms.”

He revealed this information during an online panel, entitled “Overview of the Regulation of Crypto Assets in Colombia.” The panel was hosted by Mauricio Toro, a local congressman and the author of a bill working on regulating the crypto industry in Colombia.

Castaño informed Toro that the pilot program for the crypto transaction framework will be conducted in five stages: application, selection, structuring, monitoring and feedback.

The SFC stated that the sandbox gives them the opportunity to test simulations for regulations.

“This space allows the SFC to maintain a balance between adequate regulation aimed at carrying out comprehensive supervision of the entities under surveillance, the prevention of crisis situations, the illegal exercise of financial activity and the promotion and support of new technological advances applied to financial services.” the SFC said.

While the pilot program does not yet have an exact timetable, the head of the SFC mentioned that four Colombian financial service providers have already expressed their interest in participating in the trial.

On April 4 2019, Colombia uncovered a draft bill that aimed to regulate crypto exchange platforms. The goal of this law was to give a definition, using general terms of how companies that offer cryptocurrency exchange services in Colombia should operate.

Due to bureaucratic issues such as the SFC’s progress on releasing a clear stance regarding cryptocurrencies, the debate around the bill’s approval has been delayed. However, with the crypto transaction framework pilot set to launch next year, Toro informed the panel that it may be able to “speed up discussions” that would allow the bill to be passed by 2022.