Colombia legislators have proposed a new law to regulate its crypto market. The bill’s sponsors, Senator Gustavo Moreno and House of Representatives member Julian Lopez, believe it would protect crypto users in the country by establishing a regulatory framework.
Local media outlet El Colombiano first reported the news, noting that it was presented before the Congress of the Republic last year but failed to get legislative approval.
Legislators believe Colombia is ready for regulation
However, the bill sponsors believe that the present is a good time to address the risks of the crypto industry. According to Senator Moreno, virtual asset services providers (VASPs) have been operating without consumer protection or control mechanisms because there is no law stipulating these.
Representative Lopez also noted that regulations will make the Colombian crypto market more competitive and boost adoption.
He said:
“This project seeks that there are clear rules of the game to generate a reliable and more attractive ecosystem for investment with guarantees for this emerging industry.”
Meanwhile, the bill initiators also argued that the high rate of crypto adoption in Colombia makes it necessary to have a law regulating the industry. Per Chainalysis data, Colombia is fifth among Latin American countries in the value of cryptocurrencies received between June 2023 and June 2024.
Despite the absence of clear regulations, several institutions in the country offer crypto-related services. Bancolombia, the largest bank in the country, launched a crypto product in 2024 and released its own stablecoin, COPW, pegged to the Colombian pesos.
Stakeholders agree on the need for crypto regulation but call for a balance
With the focus now on regulating crypto in the country, the proposed law, which contains 16 articles, includes provisions requiring VASPs to obtain a license before operating in the country. This provision is a common one that several other countries regulating crypto have also adopted.
However, the law also includes provisions regarding the taxation and promotion of crypto assets. Some of the rules in the legislation address anti-money laundering and terrorist financing standards.
Meanwhile, crypto stakeholders within the country support the legislation as they believe it is necessary for digital assets. Financial analyst Gregorio Gandini noted that adoption could be risky if the industry is not regulated.
He said:
“It is crucial to do this to connect means of payment to this type of assets, and in addition the investments made in this are relevant for their level of risk and volatility.”
However, there are some concerns about how regulations could affect the rate of adoption. One investor who spoke with El Colombiano, Daniel Aguilar, noted that any legal framework must be permissive and allow the sector to keep growing.
This is usually one of the key concerns lawmakers face when regulating emerging technologies, including crypto, as they must balance consumer protection with room for innovation. Aguilar also added that there should be clarity about which institution will regulate and supervise the industry.
The Colombian Financial Superintendent has been and is expected to be the leading regulator for the crypto industry, although the Bank of the Republic is also a potential option.
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