Colombia Advances Regulatory Framework for Local Crypto Industry

Colombia’s government has released draft rules for crypto companies that want to operate in the country, several months after the launch of the South American nation’s regulatory “Sandbox” project. (Not to be confused with The Sandbox, one of the leading blockchain-powered metaverse realms.)

The public will now be able to comment on the proposed regulations, put forward by the Financial Superintendence of Colombia, the country’s financial regulator. 

The rules propose a risk management system for money laundering and terrorism financing, as well as cybersecurity guidelines and ways to trace crypto transactions. 

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The approach affirms that Colombia is working toward a future where citizens will be able to buy crypto via their traditional banking accounts. 

Colombia’s “Sandbox” (or LaArenera) is a unique Latin American crypto experiment which kicked off last year after being approved by the government in 2020. It allows Colombian banks to partner with major crypto exchanges like Binance and Bitso to allow citizens to acquire Bitcoin, Ethereum or other digital assets. 

Bancolombia—the country's largest bank—struck a deal last December with New York-based exchange Gemini, allowing a limited number of clients to buy Bitcoin, Ethereum, Litecoin or Bitcoin Cash from their accounts as part of a one-year pilot program.

And in January, Binance, the world’s biggest crypto exchange, kicked off its pilot with Colombia’s third-largest bank, Davivienda, allowing 5,000 of its bank's customers to snap up digital assets. 

A total of nine Colombian banks are taking part in the experiment, which was to last for one year. Decrypt reported in November that the “Sandbox” had been slow going until then. The program was supposed to conclude in March, but that has apparently been delayed.