To date, within the incipient regulatory framework of crypto assets in Colombia, there are the Circular Letters of the FSC numbers 29 of 2014, 78 of 2016 and 52 of 2017, in which it has maintained the line of reiterating the prohibition for supervised entities to custody, invest, However, in the case of entities other than those supervised by the SFC, there is no legal restriction for them to carry out transactions with crypto assets, in addition to the warnings issued by the entity about the high risk that these types of transactions represent.

The Superintendence of Companies, through Official Letter 100-237890 of December 14, 2020, changed its doctrine, establishing the possibility of making contributions in crypto-assets to the capital of companies, also warning that crypto-assets are not considered legal tender, are not backed by central banks and therefore transactions are considered high risk.

The Central Bank, through the Technical Documents of 2017 and 2018, develops a local and international analysis on the technical and regulatory environment of crypto assets, concluding, among other aspects, that they are not recognized as currencies by the Exchange Regime, which prevents them from being used for the fulfillment of exchange operations.

Under this context, it is necessary to advance in the construction of a regulatory framework that allows local and foreign investors to develop, in an environment of legal certainty, projects associated with crypto assets in the Colombian territory.

The good news is that the Superintendency has begun to explore this universe, as we will mention below.

1. Challenges of the crypto assets pilot test

Starting this March, the cash-in (deposit of funds) and cash-out (withdrawal of funds) tests of crypto-assets through the Sandbox of the Superintendencia Financiera de Colombia - FSC (Financial Superintendency of Colombia) will begin.

These tests will be carried out with the participation of the alliances entered into between entities supervised by the SFC and the crypto-asset, exchange,platforms selected for the pilot test.

Undoubtedly, this type of exercises will generate as a conclusion highly relevant data to establish the aspects of crypto assets that should be subject to future regulation, and therefore, a harmonic and coordinated evaluation between the different entities of the State, the private sector and the academia is indispensable.

The constant increase in daily transactions involving crypto assets leads to the natural consequence that States must act to adjust their institutions and regulatory frameworks to the new realities arising from technological evolution, particularly in our days, the fourth industrial revolution.

Likewise, the State, society and academic institutions must make rapid progress in the training of technicians, professionals and those who are generally knowledgeable about the new languages, standards, environments and other aspects of disruptive technologies, in order to meet the challenges posed by the digital world.

2. Crypto assets in the environment of international transactions.

The Colombian exchange regulation, mainly contained in External Resolution 1 of 2018 and External Regulatory Circular DCIN 83, both issued by the Central Bank, establishes in an exhaustive manner the operations against which foreign currencies derived from cross-border transactions must be channeled through the exchange market.

Within the provisions of the current Exchange Regime, the use of crypto-assets to extinguish exchange operations is not accepted, basically because crypto-assets are not considered as foreign currency.

In this context, initiatives such as the one currently underway in the SFC sandbox, generate the great challenge for the Banco de la República, to evaluate the possibility that crypto assets, soon, can be used as valid instruments for the extinction of cross-border transactions.

Of course, the challenge in question implies the need to honor the supranational commitments acquired by Colombia in the fight against conducts associated with money laundering and financing of terrorism, so that whatever possible and probable alternatives may arise, they must incorporate environments of unquestionable reliability and security.

3. Conclusion

We can affirm that currently the global village is in a moment of history characterized by vertiginous technological advances, which will be increasingly deep, fast and notorious, which leads to the constant generation of regulatory obsolescence, as a result of the emergence of new developments.

Thus, based on the test currently underway at the SFC Sandpit, it would be convenient to think of building a regulatory framework environment, as in the case of customs and international changes, whereby the Executive would have the constitutional and legal power to develop the various regulatory needs that arise from the evolutions of the fourth industrial revolution.

Best regards.

Erwin