Colombia is moving closer to formal regulation of the cryptocurrency sector as the Central Bank of Colombia completes a draft framework aimed at governing digital asset activities.
The proposed legislation seeks to address the current legal uncertainty surrounding virtual assets, as the sector continues to operate without a clear regulatory structure.
Authorities say the initiative recognises the economic potential of digital asset technologies while attempting to establish safeguards for investors and the wider financial system.
The central bank’s proposal does not classify digital assets as legal currency but instead treats them as digital representations of underlying assets.
Officials believe this classification will help prevent confusion between cryptocurrencies and sovereign money issued by the state.
The draft framework follows the regulatory principle of “same activity, same risk, same regulation,” aiming to apply consistent oversight to financial activities regardless of the technology used.
Policymakers say the approach is designed to balance financial innovation with necessary protections for consumers and institutions.
Key priorities outlined in the proposal include reducing financial fraud, strengthening consumer protection measures, and safeguarding macroeconomic stability.
The draft also aims to support technological innovation within Colombia’s financial ecosystem while maintaining a competitive and open digital asset market.
Under the proposal, multiple institutions would share oversight responsibilities for the emerging sector.
The Financial Superintendence would supervise virtual asset service providers and monitor their operational activities.
The Central Bank of Colombia would be responsible for establishing rules governing stablecoins and other digital assets that could influence monetary policy.
Meanwhile, the national tax authority would maintain a registry of virtual asset service providers to ensure compliance with tax reporting requirements.
The proposal also introduces the concept of a regulatory sandbox that would allow authorities to test new digital asset innovations within a controlled environment.
Such a sandbox would allow regulators to adapt rules more effectively as the technology and market continue to evolve.
"At first the institution approached the issue with caution, but our position gradually evolved as we recognised that digital assets represent innovation that could benefit Colombia,"
Andres Murcia said.
Murcia explained that the bank initially took a defensive view of cryptocurrencies before acknowledging their broader economic potential.
He added that the regulatory approach draws inspiration from international frameworks already adopted in jurisdictions such as Brazil and Singapore.
These international examples were studied during the drafting process to ensure Colombia’s framework aligns with global regulatory trends.
Despite the draft being completed, the proposal has not yet been formally introduced to Colombia’s Congress.
Several earlier legislative attempts to regulate digital assets in the country failed to gain sufficient political support.
Government officials have indicated that competing legislative priorities may delay the formal presentation of the new regulatory proposal.