Banco de Bogotá, Colombia’s first commercial bank, intends to try permitting crypto exchange deposits and withdrawals.
Banco de Bogotá will allow bank customers to send and withdraw money through Chilean crypto exchange Buda.com in August as part of a government-sponsored pilot to test banking services for crypto platforms, according to Alejandro Beltrán, Colombia national manager for Buda.com.
Despite the fact that the service is set to begin early this month, Beltrán told us that both parties are still working out the contract’s terms and conditions.
“Banco de Bogotá has been quite detailed and meticulous in this process, which is understandable given that it is entering a new environment and they want to grasp it in all of its dimensions,” the executive explained.
The Financial Superintendency of Colombia (SFC), Colombia’s financial watchdog, stated in January that nine crypto firms (out of 14 applications) had been chosen to test banking services for crypto platforms as part of a year-long experiment.
Buda.com and Banco de Bogotá would be the second partnership to be announced. Bitpoint, a cryptocurrency exchange, and Colombian fintech Movii, a cryptocurrency exchange, began working together in July, along with Panda, a cryptocurrency exchange.
According to Beltrán, Banco de Bogotá will also work with Mexican crypto exchange Bitso, albeit that cooperation has not yet begun.
Binance, which will work with Colombian bank Davivienda and startup Powwi, is one of the nine exchanges chosen by the SFC, while Gemini will work with Bancolombia.
Banks had previously limited money transfers to exchanges due to financial restrictions, despite the fact that people had been doing so without declaring that they were crypto activities, according to Beltrán.
While the pilot isn’t designed to lead to new rules, it will allow exchanges to cooperate with large banks with more knowledge and coverage, according to Beltrán. It will also help the SFC to have a better understanding of the crypto market.
Colombian officials have announced crypto tax guidelines and anti-money laundering (AML) legislation, as well as a regulatory sandbox in September 2020 to broaden its fintech regulatory testing environment.
Earlier this year, the bank launched a pilot initiative to investigate crypto asset-related business concepts.
The pilot, according to Beltrán, is not part of the regulatory sandbox and has no intention of regulating the industry.
“We feel it can be a reference for regulation in the future,” he said, “but this test is not meant for that purpose.”