As it stands, crypto, and those who operate in it, have no legal status or protection in the country. But a new breed of Colombian lawmakers are working hard to change that—even if at a bureaucracy's pace. Despite an unfavorable legal framework, Colombia is still the third-most important FinTech economy in Latin America.
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In , the number of FinTech businesses grew by 61 percent compared to the year prior, according to the Spain-based, FinTech incubator Finnovista. The next year, the Colombian FinTech Associated reported that the figure rose by another 76 percent. And this year, there are already 45 percent more FinTech startups than in Some of these startups, such as Daexs and Panda , focus specifically on the blockchain and cryptocurrency industry. But they do so in a perilous regulatory environment. Colombian law, for example, does not currently recognize the legality of cryptocurrency exchanges—and losing access to financial services for unlawfully handling cryptocurrencies, such as Bitcoin , is all too common.
One of the most significant attempts to regulate the crypto industry came in the form of Bill of The proposal sought to establish a set of rules that would formally legalize cryptocurrencies and their exchange via peer-to-peer transactions or through third parties, such as crypto exchanges, all while generating a tax of 5 percent per transaction.
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But the Colombian Senate rejected the proposal in June for fear of giving way to fraudsters operating pyramid schemes, Ponzis, multi-level marketing, and other scams. The response, formalized in a numbered document by the Superintendency, was precise:. Nor are they subject to the control, surveillance or inspection of this Superintendency," the agency explained. In other words, if you make any sort of transaction with cryptocurrency and are ultimately swindled somehow, the best you can hope for is to gripe and moan on social media.
The Colombian government cannot help you. Colombians are well aware of the nebulous legal territory in which crypto operates in the country and yet—evidently—their enthusiasm for Bitcoin and other digital currencies goes undeterred. According to a recent survey commissioned by peer-to-peer Bitcoin exchange Paxful , 91 percent of Colombians are convinced that cryptocurrencies are the future of global trade.
Also, it is recommended to have a wallet of your own for security reasons, preferably a hardware wallet. These ATMs allow users to instantly purchase and sell cryptocurrency using cash, however most of them require at least a phone number, so they aren't totally private. The Ledger Nano X is the newest crypto hardware wallet, and is very easy to use. Electrum is a Bitcoin-only wallet that has been around since It's easy to use, but has advanced features. However, no one should have been surprised. Such returns are impossible to guarantee, and can only be achieved through organizing the company on a Ponzi scheme.
When the founders could no longer keep the illusion going, they simply took everyone's money and left. All in all, it is beleived that more than 4, customers were scammed out of their Bitcoins, many of whom invested into Me Coin after personally meeting the founders face to face across the country. The company purports to be an online investment platform for cryptocurrencies and forex trading. There are several red flags about this company, most notably that it claims to be based out of the Canadian city of Nova Scotia, even though there is no city of Nova Scotia in Canada NS is a province, similar to a state.
They also claim to have offices in the United Kingdom and Bogota, Colombia.
Canadian officials have confirmed that SBlock-Trade is not licensed to operate such an exchange in Canada so customers should beware. As you may or may not know, not long ago, Venezuela was the wealthiest country in South America due to its vast oil reserves. Its then leader Hugo Chavez eventually nationalized the oil reserves began to use the proceeds to fund large welfare programs for the country's poor. Unfortunately, this resulted in massive debt and overspending that the country could not handle.
Colombian Banks to Work with Exchanges on Year-long Crypto Pilot
This was especially true after oil prices drastically fell. To remedy the situation, Chavez began printing money so to create programs that would pay for various necessities of the people, but this resulted in hyperinflation that continues to today under leader Nicolas Maduro. It's so bad in fact, that the currency is essentially worthless. Bitcoin became a useful tool for Venezuelans, however attaining it can be difficult except through bribery and corruption. One avenue that has been very popular is for relatives in nieghboring Colombia to buy it at ATMs and send it to Venezuealans across the border.
For a more in depth look at how Colombia is affected by the civil unrest and hyperinflation in Venezuela, and the role Bitcoin is playing as an exit hatch for Venezuelans, check out Peter McCormack's Defiance TV episode on this topic below:. Bitcoin is accepted at lots of stores and service providers all over Colombia.
So many, in fact, that we couldn't possibly list them all here. However, you can find specific kinds of services and goods filterable on a map over at coinmap. Any exchange with a Euro trading pair will allow you to sell your Bitcoin for fiat currency. Bitpanda and Bitcoin.
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LocalBitcoins is another option. Here, you can buy and sell Bitcoin for a wide range of payment methods, from gift cards to bank transfers. LocalBitcoins is a peer-to-peer P2P exchange, where you buy and sell with another individual. This does introduce a degree of risk, though by ensuring that you conduct all business on the platform, make use of its escrow services, and only trade with users who have a good reputation, you'll minimize any potential problems.
Jordan Tuwiner is the founder of BuyBitcoinWorldwide.
His articles are read by millions of people each year looking for the best way to buy Bitcoin and crypto in their country. He has also written extensively about the history, technology, and business of the crypto world. Jordan is also the creator of some of the internet's most famous Bitcoin pages, including The Quotable Satoshi and Bitcoin Obituaries. Disclaimer: Buy Bitcoin Worldwide is not offering, promoting, or encouraging the purchase, sale, or trade of any security or commodity.
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