The Colombian government still does not authorize or legalize the use of Bitcoins for financial transactions, according to Jorge Castaño Gutiérrez, Superintendent, Financial Superintendence of Colombia.
The country has no plans to make it illegal, as of today. The top finance regulator clarifies the government’s viewpoint in a circular about digital currency last week.
Colombian government’s stance on Bitcoin
The legality of Bitcoin is different in every country. Many have explicitly regulated the use of this electronic currency in different modes of payments while others still do not approve it. Colombia is one of those countries that do not recognize cryptocurrency as a government currency.
Gutiérrez reiterates the country’s stance on the digital currency in a circular published last week. According to him, the country’s sole monetary unit and unit of account are the pesos printed and issued by the Banco de la Republica, citing Article 6 of Law 31.
He went on by including Article 8 of the same law, which states that banknotes and coins must be in the peso and will be the only means of legal payment in the country. Therefore, Bitcoin is not considered a currency of the country because it does not constitute a means of payment or legal tender.
Gutiérrez argues that:
“Bitcoin is not an asset that can be considered a currency because it does not have the support of the central banks of any countries”.
Bitcoin-based Ponzi schemes in Colombia
The prevalence of Bitcoin-based Ponzi scheme or investment scams in the country is the other reason for the government’s strong opposition. Gutiérrez has warned the public about the potential risks of Bitcoin as well as prohibited banks from dealing with this electronic money.
Gutiérrez also said in an interview that those involved in the Bitcoin pyramid schemes in raising money from the Colombians could face up to 20 years of imprisonment. Both organizers and promoters of these businesses could be charged with criminal consequences.
Bitcoin currently unauthorized, but not banned
Despite several circulars against Bitcoins, the Colombian government has not yet passed laws stating how the country should treat the electronic money. Cryptocurrency is unauthorized, but not banned in the country. In fact, the number of people using Bitcoins has been growing in Colombia.
Localbitcoins shows that the weekly volume for Colombian pesos has surpassed 2 billion in May.