Will Colombia Become a Cryptocurrency Hub?

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Colombia may become the next cryptocurrency hub in South America and the world. Why? Ivan Duque, Colombia’s president, has promised that it will reduce taxes to crypto and blockchain companies. Bogotá is already one of the most important centres for virtual currencies in Latin America.

Colombia as a Cryptocurrency Hub

Virtual currency and blockchain companies operating in the region may looking at Colombia if the president confirms a tax exemption to the industry. During an opening speech at the annual International Congress on Information and Communication Technologies (ANDICOM), Duque announced the plans it has for the future.

He outlined that his administration would be reducing taxes for a period of up to five years. The only condition that he mentioned was related with the number of new jobs that the companies must create.

This may be a great incentive for certain companies operating in the region to re-locate their headquarters in Bogotá.

Mr. Duque showed his interest and commitment to explore the use of blockchain technology. He mentioned that distributed ledger technology (DLT) could help the government in areas such as economy, security, justice and health.

During the speech, Duque mentioned:

“If we want to overcome corruption, technology can be instrumental. The Government must start by setting an example. We take it seriously; we want a modern Colombia.”

However, he did also comment on the possibility to regulate the market. This is something that several countries are planning and are starting to do.

On the matter, he said:

“We have to define what type of regulator we want and move towards a single, modern regulator that understands the need for transversal innovation.”

Duque started his period as a president just some weeks ago. His predecessor was not very crypto friendly. This shows that the country is moving towards a new approach to virtual currencies and blockchain technology.

Back in July, we wrote at CoinStaker that the Colombian Central Bank was working with the R3 Consortium and other 39 different companies. The consortium wanted to test a blockchain system that would be used by several firms in the space.

The main purpose of the test was to better understand blockchain technology. The project was related to Know Your Customer (KYC) rules. The new system allows for over 300 transactions to be processed using the so called Corda’s platform.

According to the official announcement, the new system reduces costs and eliminates the need for institutions to actualize the data of their clients.

“KYC requirements present a significant challenge to financial institutions and the process is often slow and time-consuming,” commented David E. Rutter, R3’s CEO. “Not only does this project demonstrate how blockchain can allow institutions to retain control of and manage their own identity, but it also validates the design choices we made in our approach to privacy on Corda.”

Colombia is clearly becoming one of the most important hubs in Latin America for cryptocurrencies after Buenos Aires and Sao Paulo.

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