Colombia recently had its first Commercial bank, Banco de Bogota open its doors to the public. However, this bank was not content with being another average bank. Instead, right out the gate, they have started to test the waters of Cryptocurrencies. More specifically, they plan on allowing people to withdraw or deposit with their partnered crypto exchange.
This new effort to introducing crypto to the general public is part of a government-sponsored pilot program. Through the program, customers of the Banco de Bogota can withdraw from and send money to Buda.com. Buda.com is a Chilean crypto exchange service, who will start in August, according to their manager for Colombia, Alejandro Beltran.
According to various sources, both parties are working to start at the beginning of the month. However, they are still working on the terms of the contract. Seeing how they are entering a brand new market, they are not leaving anything to chance. Alejandro said that Buda.com will be taking all the time they need to understand this new world that they are entering.
The Financial Superintendency of Colombia (SFC), Colombia’s financial watchdog, announced the different crypto firms that they will be working with. They chose each of these nine firms out of fourteen to test their yearlong project. The deal between both Banco de Bogota and Buda.com is the second one to launch soon. Both crypto exchanges, Panda and Bitpoint, recently started working with Movii, another Colombian fintech firm.
Out of the chosen exchanges, Davivienda (a Colombian Bank) and Powwi (a fintech firm) will be working with Binance. On the other hand, Gemini will be working with Bancolombia; a financial solutions service provider.
Until this recent pilot program, the country had strict financial regulations. In fact, these regulations restricted banks from transferring money to crypto exchanges. But with this new project they are testing what crypto exchanges are capable of.
Of course, there is an important distinction to make here about what the project will be doing. While it does not guarantee a change in legislation, it will allow crypto transactions through a select few banks. These banks have the infrastructure and the experience to offer valuable insight on how the crypto market works. The SFC will also be paying close attention to this project and see if it can also work on a larger scale.
The Colombian government launched another project to expand the regulatory testing environment of many fintech companies. On the other hand, regulators have also been working hard to establish anti-money laundering and crypto tax guidelines. Again, while this project may become a reference point for regulation in the future, currently, that is not its purpose.