After inviting companies to participate in its new regulatory sandbox, Colombia’s government has taken further steps towards introducing a blockchain regulatory framework. A pilot program approved this month will be open to companies until December 31, allowing companies to test digital currency transactions without the usual regulatory oversight. Speaking at a panel on Overview of the Regulation of Crypto Assets in Colombia, the Colombian financial regulator’s head said the pilot program would run through 2021.
“The regulatory space would allow firms to operate without many restrictions.”
Jorge Castaño, the head of Colombia’s Financial Superintendence (SFC), said the regulatory space would allow firms to operate without as many restrictions, while still maintaining oversight. “This space allows the SFC to maintain a balance between adequate regulation aimed at carrying out comprehensive supervision of the entities under surveillance, the prevention of crisis situations, the illegal exercise of financial activity, and the promotion and support of new technological advances applied to financial services,” Castaño said. He further informed that the pilot program is expected to follow five phases before reaching its conclusions: application, selection, structuring, monitoring, and feedback.
Colombia had unveiled a draft proposal for regulating crypto last year.
The SFC said, “four Colombian financial services providers” had already expressed an interest in participating in the program. However, there is as yet no timeline setting out exactly when each phase will run. The move comes after Colombia unveiled a draft proposal for regulating digital currency in 2019, aiming to provide legal definitions for how digital currency companies should operate in Colombia. Debates around the proposed bill were held up by regulatory issues, with the SFC waiting longer before confirming its view on cryptocurrencies. With the launch of the new pilot program, it is expected that an eventual crypto law could come into effect in the future, once the trial results have been compiled and studied.
