Colombia .. New laws to regulate digital currencies to avoid risks and attract investments

Colombia is close to new laws to control the digital currency market through the license of virtual service providers, and Colombians deputies have presented the new bill to regulate that sector within the country.

Senator Gustavo Moreno and MP Julian Lopez submitted the draft law to the Colombian parliament after a failed previous attempt to pass similar legislation last year 2024.

“Lopez” stated that the draft law aims to establish clear rules to create a reliable investment environment that guarantees the development of this emerging industry.

The law includes several items, the most important of which are monitoring the digital currency market and related activities, setting mechanisms for financial supervision and ensuring transactions of transactions, enhancing awareness and financial education on digital assets, regulating taxes imposed on digital currencies, preventing money laundering and terrorist financing operations, and protecting investors from fraud and promoting sustainable growth of the industry.

One of the main aspects of the project is the introduction of a license system for virtual asset service providers, which means that if the law is approved, digital currency companies will have to obtain an official license to work within Colombia, which makes them in line with the global regulatory regulations applied in several countries.

Currently, digital currency trading platforms are not illegal, but they work in an unorganized environment, which leads to uncertainty and leaves users vulnerable to risk due to the absence of legal protection mechanisms.

The draft law indicates the growing role of digital assets in the Colombian economy, where Colombia ranks fifth in Latin America in terms of the volume of digital currency transactions, and it is estimated that more than 5 million Colombians are trading digital currencies regularly, with a circulation of digital assets worth $ 6.7 billion during the year 2024.

Despite this growth, there are still concerns about financial fraud, such as Ponzi and Harmese plans, in addition to the use of digital currencies in illegal financial activities.

Besides the organizational efforts, Colombia is also studying the possibility of launching a digital currency of the CBC Central Bank and this started in 2023, and the Colombian Central Bank entered into a partnership with Ripple to test the CBDC National currency project to improve local payment systems, despite that promising start, but the future of the project is still unclear especially after Ripple retracted some of its efforts in developing digital currencies For central banks.