Stablecoin issuer / redeemer in Colombia

The Superintendencia Financiera de Colombia (SFC) is the main financial regulator that continuously monitors and sets risk obligations for the national financial system. While it issues warnings and restrictions regarding crypto assets, its mandate is broadening to encompass comprehensive systemic risks, including environmental, social, and climate-related risks, demonstrating a focus on holistic banking stability rather than solely on digital asset prohibition.

E-money/Payment Tokens: Stablecoins are generally not classified as e-money or legal tender in Colombia, as they are not issued by the central bank and do not have the backing of the state. While they may function as a means of payment, they do not currently fall under specific e-money regulations unless they are issued by a regulated financial institution and meet specific criteria.

Securities: This is the most likely classification path if a stablecoin exhibits characteristics of a security, such as:

Circular Externa 027 de 2021 (SFC): This circular reiterates warnings about the risks of crypto assets and outlines the prohibition for supervised entities to participate in crypto activities, except within the framework of the regulatory sandbox. It doesn't explicitly classify stablecoins but emphasizes the general risk.

There are no specific reserve requirements for stablecoin issuers under Colombian law.

There is no specific "stablecoin issuer license" in Colombia.

Financial Intermediation: If a stablecoin issuer is performing banking-like activities (e.g., taking deposits, making loans with stablecoins).

Securities Brokerage: If the stablecoin is deemed a security and the issuer is facilitating its trading.

Payment Service Providers: If the stablecoin's primary function is payment processing and the issuer operates a payment system.

The SFC's Regulatory Sandbox (La Gaceta), established by Circular Externa 027 of 2021, allows supervised entities to test innovative financial products, including those involving crypto assets, under controlled conditions and temporary authorizations. This allows for experimentation without full licensing in the initial stages.

Without specific stablecoin legislation, redemption rights would generally fall under general contract law and consumer protection statutes.

If a stablecoin issuer promises 1:1 redemption against a fiat currency or other asset, failure to honor this promise could lead to:

Breach of Contract: Under the Civil Code (Código Civil) and Commercial Code (Código de Comercio).

Consumer Protection Violations: If the issuer is considered a provider of goods or services to consumers, claims could be made under the Consumer Statute (Estatuto del Consumidor - Law 1480 of 2011).

Regulatory Sandbox (La Arenera): The closest mechanism for innovation is the SFC's La Arenera, a regulatory sandbox established under Circular Externa 021 de 2023. This allows financial entities (and in certain cases, non-supervised entities in partnership with supervised ones) to test innovative financial services, including those involving crypto assets, under a controlled environment with temporary waivers or specific authorizations. However, participating in La Arenera does not exempt a token from being classified as a security; rather, it allows for a structured dialogue and potential adaptation of regulations if a security token is being tested.

Registration Regime (AML/CFT): Colombia primarily operates a registration regime for AML/CFT purposes. All VASPs, regardless of whether they are licensed or participating in the sandbox, are considered "obliged entities" by the Unidad de Información y Análisis Financiero (UIAF) and must:

Exchanges (Virtual Asset Service Providers - VASPs):

General Operation: VASPs operating without direct interaction with the traditional financial system (e.g., direct fiat on/off-ramps via banks) are primarily subject to AML/CFT obligations but are not licensed by the SFC. They operate in a somewhat "grey area" from a licensing perspective, though the UIAF views them as obliged entities for AML purposes.

Interaction with Financial System: If an exchange seeks to offer fiat currency on/off-ramps through Colombian banks, it generally needs to participate in the SFC's Regulatory Sandbox ("La Arenera") in partnership with a regulated financial institution. This sandbox allows for supervised pilot programs.

SIC: Fines in the hundreds of millions of Colombian Pesos (COP) against promoters and entities. For instance, in August 2022, the SIC sanctioned "Smart Business Corp SAS," "Bux Corp SAS," and several individuals involved with OmegaPro, imposing fines totaling over COP $2.400 million (approx. USD $600,000 at the time) and ordering the immediate cessation of activities and restitution to affected consumers. Further fines and orders against other promoters followed.

Fiscalía: Criminal charges for illegal mass capture of money, aggravated fraud, and money laundering. Arrests and asset seizures.

No specific "crypto custody license" currently exists in Colombia.

The "La Arenera" Regulatory Sandbox: This is the closest Colombia has to a structured approach for crypto firms.

Cryptocurrencies are not legal tender in Colombia.

No specific regulations for segregation of client crypto assets.

Law 526 of 1999: This law created the Financial Information and Analysis Unit (UIAF) and established its functions as Colombia's Financial Intelligence Unit (FIU). It is the foundational law for AML/CFT in the country.

Decree 1068 of 2015 (as modified by Decree 169 of 2020): This crucial decree explicitly incorporates "virtual assets" into the scope of assets and operations that the UIAF must analyze to prevent money laundering and terrorism financing. It empowers the UIAF to establish reporting requirements for entities involved in operations with virtual assets.

Resolución 314 de 2021 de la UIAF: Por la cual se imparten instrucciones relacionadas con el SARLAFT a los proveedores de servicios de activos virtuales.

FATF Recommendations: As a country committed to international AML/CFT standards, Colombia aligns its regulations with the FATF Recommendations. Recommendation 15 specifically targets new technologies, including virtual assets and VASPs, requiring them to be regulated for AML/CFT purposes, licensed or registered, and subject to effective systems for monitoring and ensuring compliance.

Identification and Verification of Customers:

Risk-Based Approach: VASPs must implement a risk-based approach to CDD. This means applying enhanced due diligence (EDD) for higher-risk customers (e.g., Politically Exposed Persons - PEPs, customers from high-risk jurisdictions, complex corporate structures, high-value transactions, or unusual transaction patterns) and simplified due diligence (SDD) for lower-risk customers.

Ongoing Monitoring: Continuous scrutiny of transactions undertaken throughout the course of the relationship to ensure that they are consistent with the VASP's knowledge of the customer, their business, and risk profile, including, where necessary, the source of funds.

Report suspicious transactions (SARs) to the UIAF.

UN Sanctions: As a member state of the United Nations, Colombia is legally obligated to implement sanctions imposed by the UN Security Council. UIAF Resolution 314/2021 directly references adherence to UN Security Council resolutions as a core component of ML/TF risk management. This includes asset freezes and other restrictions against listed individuals and entities.

Virtual assets are intangible assets/goods: For tax purposes, they are considered assets that are part of the taxpayer's patrimony (wealth).

Transactions with virtual assets constitute taxable events: Their acquisition, holding, and disposition (e.g., sale, exchange for goods/services) generate tax obligations based on the nature of the transaction.

Individuals: Subject to the progressive income tax rates in the Colombian Tax Statute (Articles 241, 330, and 336). These rates range from 0% to 39% depending on the taxable income bracket.

Businesses (Legal Entities): Generally subject to the corporate income tax rate, which is 35% (as of 2023-2024).

Services Related to Cryptocurrency: Services provided by third parties related to cryptocurrency operations, such as exchange fees, platform commissions, or transaction fees charged by crypto platforms, are generally subject to the standard VAT rate of 19%. This is because these are services rendered for a fee.