Colombian lawmakers have introduced a bill to regulate the country’s crypto sector, El Colombiano reported on March 3.

According to the report, Senator Gustavo Moreno and House Representative Julian Lopez submitted the proposed legislation to Congress on March 3. This effort follows a failed attempt to pass similar regulations last year.

Lopez reportedly 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.”

Considering this, the bill outlines a framework for overseeing crypto-related activities, covering areas such as market surveillance, asset promotion, education, and taxation.

It also includes measures to prevent money laundering and terrorist financing, enhance investor protection, and foster the industry’s growth.

Meanwhile, a key aspect of the proposal is the introduction of a licensing system for Virtual Asset Service Providers (VASPs). If enacted, this would require crypto service providers to obtain official licenses to operate in Colombia, aligning with regulatory approaches seen in other countries.

The lawmakers noted that while VASPs are not illegal, they have been functioning in an unregulated environment. This lack of oversight creates uncertainty and exposes users to risks due to the absence of consumer protection mechanisms.

Colombia’s crypto market

The bill’s reintroduction highlights the growing role of digital assets in Colombia’s economy. A 2024 report from Chainalysis ranked the country among the top five in Latin America for crypto transactions.

Additionally, estimates suggest that more than five million Colombians actively engage in crypto trading, with around $6.7 billion worth of digital assets circulating in 2024.

However, concerns remain over fraudulent schemes such as Ponzi and pyramid scams and the use of cryptocurrencies for illicit financial activities.

Meanwhile, Colombia has also explored the potential of a central bank digital currency (CBDC). In 2023, the country’s central bank partnered with Ripple to test a CBDC solution to improve its local payment systems.

Despite the initiative’s promising start, its current status remains uncertain as Ripple has stepped back from its CBDC efforts.

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