Colombia Releases New Regulations For Crypto Firms Operating in the Country

The Colombian government passed new drafts for the local crypto organisations to continue operations in the country

The reports stated that South America is inching toward new regulations to increase the interaction between the banks and the crypto firms. The Colombian government has provided a draft with a set of rules for all the crypto firms working in the country. The new of laws came out various months after the release of the Sandbox project which is the regulatory framework from Colombia based on the metaverse tokens, powered by the leading blockchain technology.

The nation is aiming to create a secure network on which financial institutions such as banks and the local crypto firms work together. According to the Colombian financial regulator, the public will now be able to comment on the proposed regulations imposed by the Financial Superintendence of Colombia.

The rules developed by the Colombian authorities proposed a risk management system for money laundering and terrorist financing activities. It also covered the cybersecurity guidelines and ways to trace the transactions in the exchanges and trading of cryptocurrency.

The approach affirms that the Colombian legal bodies are processing the new laws to be implemented that assure a future of purchasing and selling crypto assets through their traditional banking accounts.

The “Sandbox” (LaArenera) is a unique Latin American crypto experiment that was initiated the previous year with the approval of the government in 2020. It allows the Colombian banks to work in accordance with the major crypto exchanges including Binance and Bitso. This will enable the citizens of the country to easily exchange Bitcoin, Ethereum and other digital assets.

The largest bank in Colombia, Bancolombia came upon a successful deal with the New York-based exchange Gemini, last year in December. The deal allowed limited clients to purchase crypto coins including Bitcoin, Ethereum, Litecoin or also the Bitcoin Cash from their accounts as part of a one-year pilot program.

Also in January, the world’s famous crypto exchange network, Binance initiated its pilot with Colombia’s third-largest bank, Davivienda, allowing 5000 of its bank’s clients to create digital assets.

The experiment will be conducted by 9 Colombian banks for the duration of one year. Decrypt reported last year in November that the Sandbox project had not been fast for now. The deadline for the program was March but it has been delayed apparently.

Suggested Read: Colombian Money Laundering Watchdog Delays Crypto Transaction Reporting Regime