Colombia aims for CBD and Bitcoin regulatory framework with Gustavo Petro

Key facts:
  • The CBD contradicts the Bitcoin ideology, but it can have a following in Colombia.

  • Bitcoiner says the regulation of Bitcoin in Colombia should come from the community.

Gustavo Petro’s arrival at Colombia’s presidency brought with it uncertainty around the Bitcoin (BTC) ecosystem, as little has been said about the sector since his administration.

Will they create a Central Bank Digital Currency (CBDC)? Or rather, will there be regulation of the cryptocurrency market? Everything indicates that both directives are within the new government’s plan.

Petro, the first left-wing president of Colombia, Show some sympathy for the new economy. On the one hand, he spoke of embedded schemes for cryptocurrencies, such as bitcoin mining with excess capacity, which raised expectations among supporters of emerging markets in the land of coffee.

Recently, as a sign of its regulatory intent, its government announced participation in technical working groups to be carried out with representatives from the crypto sector. With this business strategy Seeks to direct a law that can finally regulate the market in Colombiaas reported by CriptoNoticias.

But on the other hand, Petro has also shown interest in creating a Central Bank Digital Currency (CBDC). This is to avoid tax evasion.

Although he did not express himself properly, representatives of his government echoed his plans. One of them is Luis Carlos Reyes, head of the National Tax and Customs Administration (DIAN), who announced his intention to bring the Colombian peso to its digital version. This, as part of a tax reform that has already caused protests in the Colombian streets.

In essence, both paths that the Petro government can follow differ in their philosophies, Taking into account that Bitcoin It is a representation of financial freedom Central bank digital currency represents fiat money, but it is digital.

However, Petro’s intention is clear, especially since his administration must face, at all costs, an economic crisis that we have not seen before. The idea, it seems, is to fight it along with users of digital assets, which are growing more and more in Colombia.

Petro assumed the presidency of Colombia on August 8, 2022. Source: CNN.

New Contributors: Cryptocurrency Users

To delve deeper into this topic, CriptoNoticias spoke with two professionals and representatives from the Bitcoin ecosystem in Colombia. One of them is Camilo Suarez, president of the association blockchain (asoblockchain), Organization dedicated to the new economy of the Latin American country.

For Suárez, Petro will work in unison in creating a CBDC and in regulating the Bitcoin market. This is to get the “new taxpayers” adding money to the national treasury, specifically, From the crisis experienced by the country of coffee.

“The Petro government has a great need because the country is running a massive fiscal deficit, in a massive budget deficit, unprecedented in history. what do you need? Suarez pointed to new forms of liquidity, that capital is entering the country.

He agreed with Ricardo Armenta, director of communications at Bitpoint, a bitcoin and cryptocurrency exchange with operations in Colombia. For this CEO, Petro will go on both fronts, which, in his opinion, It will create a specific environment for the digitization of the economy.

A CBDC, the “franchises” project

In a conversation with this medium, Armenta said that CBD “brings significant advantages to the country”, particularly with regard to Transaction tracking and money laundering control issuesrelevant in Colombia.

In addition, he suggests that with this project “there are a series of improvements to the current model of the Colombian peso.” For this reason, he considers it a “logical bet on the Banco de la República”.

Armenta also explained that CBDC is a model that is “very different from bitcoin and what it stands for.”

It coincided again with Suarez, who emphatically indicates this CBDC only seeks to give you “absolute control” of your personal finances The Central Bank of Colombia.

Camilo Suarez, President of Asoblockchain, an organization dedicated to cryptocurrency. Source: Asoblockchain.

What will be the reaction of a Colombian user before CBDC?

Facing the possibility of creating a central bank digital currency, Armenta explains that users can interact based on their interests and ideologies.

The specialist asserts that there are users who “love decentralization and what Bitcoin stands for”, And they see this cryptocurrency as an “element of ideological freedom.” For these users, which puts them on the “extreme” side of the bar, the reaction to CBDC will be negative. This, by acknowledging that this technology “is centralized money.”

It goes hand in hand with what Camilo Suarez revealed, who confirms it No Bitcoiner will approve CBDC On Colombian soil, because it is “the opposite of our philosophy of freedom.”

In this sense, Suarez warned that there is fear and uncertainty among Colombian users. “And I think if we did a survey, a good portion of those consulted wouldn’t agree with the CBD.”

Now, another type of user, who sees cryptocurrency as an easy-to-use solution for their money, Yes, you can find value in CBDC in Colombia. First, because paper money is still widely used in that country, Armenta suggested.

Thus, think about:

Depending on the type of user, there will be a different type of interaction. If they were ideological users, it wouldn’t be something they would take well and the adoption situation would be simulated in the present. But the common user will find value, especially if the CBDC is created based on the user experience through mobile devices.

Ricardo Armenta, Director of Communications at Bitpoint.

Ricardo Armenta, Director of Communications at Bitpoint. Source:

Bitcoin regulation should be grassroots

Regarding the regulatory issue of the Bitcoin market in Colombia, Suarez pointed out that the optimal regulation It must be built from businesses and from the sector itself.

In his opinion, there are usually restrictive laws because they were coined by “people who have never had the extension Pocket wallet And who doesn’t know the difference? blockchain Bitcoin”.

Bitcoin unionists have criticized that a bill introduced by former Congressman Mauricio Toro, to begin regulating the Bitcoin market, Not presented to the sectors of the crypto ecosystem in Colombia, because they were unable to participate in its formulation. “It was done behind closed doors, on a workbench,” he denied.

He said that while they lauded the legislative intent, They don’t share it from Asoblockchain ’cause we don’t feel represented’ –

In addition, in line with Toro, Suarez criticizes the fact that it is the banks, which wield “giant power,” in the words of the former congressman, that are maneuvering the bill.

It is no secret that banking around the world has placed kings, presidents, and members of Congress. If we allow in Colombia the same traditional banking legislation on cryptocurrencies, we will be at a moment illegal, because they want to be the only ones who can protect crypto assets.

Camilo Suarez, President of Asoblockchain.

On this point, contrast with Riccardo Armenta, who defends it rather Colombia has one of the “most progressive regulatory initiatives in Latin America”the Petro government inherited from its previous administration.

According to Armenta, “It is clear what will happen in the immediate future for the cryptocurrency market in Colombia.” “We will have a formal marketplace, with clear terms for banks, to give users peace of mind,” he predicted.

The bill that Armenta mentions is the one approved by the Colombian Congress in the first session. The project had lost ground in Parliament after the departure of Mauricio Toro. But Congressman Julian Lopez saved himwho organized a public hearing to discuss it. The Petro government and representatives from the cryptocurrency sector joined in the conversation.

The project, dedicated to the unique regulation of exchanges for being a “gateway” to the ecosystem, It must be discussed three more times in Congress for final approval. Otherwise, it can be archived.

on the other side The Petro government itself contributed to the regulation of the market. From the FSA, they informed weeks ago that they were about to publish the first draft of the project To organize transactions and operations using Bitcoin and other cryptocurrencies.

The Colombian Congress has the possibility of regulating the work of the stock exchanges operating in that country. Source: PL.

It is a document drawn up as a result of the processes of the Regulatory Protection Environment, a mechanism in which companies connected to the Bitcoin ecosystem work alongside banks and Fintech firms under the supervision and oversight of the government. The program was implemented under former President Duque.

Bitcoin-based populism?

Pietro has a political past that has drawn criticism from his critics, Who regret that the new Colombian president appeals to populism to win followers. Does this populist include Bitcoin?

for Camilo Suarez, It does not depend on the left or the right“because we risk a complete structural overhaul,” starting with the way the money is used and employed.

In his view, the government of Gustavo Petro in Colombia is a new government And it does not cease to cause a lot of uncertainty given the cases seen in Latin America.

“But we have to be more organized than ever, because if the populist rhetoric of this government is that it listens to communities and unions, we have to organize ourselves and get out there,” he said.

In Colombia, the arrival of state control with which Bitcoin will have a lot to do is imminent. So, It seems necessary for Colombians to unite as a bloc To learn how to counter (if necessary) any action that restricts or prevents the circulation and spread of cryptocurrencies in the national economy.

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