With the rapidly increasing adoption of cryptocurrency in Colombia, the country’s tax authority, Dirección de Impuestos y Aduanas (DIAN) is taking strict measures to introduce a regulation that would address tax evasion amongst players in the digital currency ecosystem.
In a statement released on 28th January, the watchdog stated that it would attempt to better regulate the cryptocurrency space, to work towards a more ‘honest’ Colombia. The DIAN also admitted to the rapid growth in the crypto world, in usage and adoption. Colombia is rated and is consistently the second most active Bitcoin(BTC) trading country in Latin America, according to statistics.
The setting of regulations may as well be a path to adopting cryptocurrencies in Colombia and making them legal tender. However, the achievement of this can only be dependent on the number of government administrations that agree to it, the increasing rate of users, and the backing of key stakeholders in the crypto ecosystem.
The move from DIAN is deemed a proactive approach to curb tax evasion, and to properly regulate the cryptocurrency space against tax evaders.
The status quo in Colombia is that there is a ban that forbids financial institutions from participating, investing, managing, brokering, or protecting cryptocurrency operations. However, Colombian citizens are very much permitted to invest. With the rapid rate of digital currency adoption and an increasing number of usage in Colombia, these regulative measures to eradicate tax evasion have to be “strictly” put in place.
Colombia Adoption of Crypto as a Legal Tender
Although the possibility of this is seen, nevertheless, the country still has a long way to go in seeing this through the way it played out in El Salvador.
Even with the rapid increase in the rate of crypto adoption in Colombia, an analysis given on usage capacity states that Colombia ranks as the 16th nation with a high number of cryptocurrency holders.
As enormous as this might look, only 6.14% of the total population possess a digital currency. This would be a poor amount should this data be factored in as a prerequisite for issuing a sovereign digital currency, implying Colombia has a long way to go in its pursuit of mainstream adoption of crypto assets.