People in Colombia will soon have a new option to buy their favorite cryptocurrencies using their bank accounts just as easily as they buy any other product.
The US-regulated cryptocurrency exchange Gemini announced that it had finally completed all the necessary steps to move to the implementation phase of a project that would allow Colombians to buy cryptocurrencies with the funds stored on their Bancolombia accounts.
This partnership is of great importance for the development of the local crypto industry as Bancolombia is the largest bank in the country, with total assets amounting to $275.76 billion in 2020 and over 16 million users in the same year.
Gemini and Bancolombia Partner to Offer Crypto Services in Colombia
Although the move could serve as a frictionless on-ramp for millions of Colombians to enter the crypto world, the service will for now be restricted to a limited number of users. Neither Gemini nor Bancolombia specified how many people will qualify for the service.
The project will last for one year, starting on December 14, 2021. During that time, all eligible users will be able to buy bitcoin (BTC), Ether (ETH), Litecoin (LTC), and Bitcoin Cash (BCH) from Gemini using their Bancolombia accounts.
That is to say, Gemini would handle processes involving cryptocurrencies, and Bancolombia would deal with all matters concerning the movement of any amount of Colombian pesos -the country’s official currency.
The project is being executed within the regulatory sandbox that the country is currently implementing as a way to stimulate innovation in financial services. This is also why it is so heavily restricted and slowed down.
In a regulatory sandbox, government regulators grant certain advantages to startups that wish to test the viability of their proposals but are unable to implement them due to heavy bureaucratic procedures and possible legal hurdles.
Cynthia Del Pozo, Gemini’s Principal, Strategy and Corporate Development, shared her excitement in an official blog post, noting that the crypto industry could help with the expansion of many Latin American economies.
Crypto is borderless by nature, and we are committed to expanding crypto access to individuals across the globe. We believe that crypto can play an important role in the development of Latin America as interest in blockchain and innovative technologies proliferates throughout the region.
As we continue on our mission to build the future of finance, we invite institutions from across Latin America exploring opportunities in crypto to reach out to us here.
The Trend of Regulatory Sandboxes
Colombia’s regulatory sandbox is being promoted by the country’s Financial Superintendency with the collaboration of other regulatory bodies.
There are nine projects approved for implementation. However, only two are in an operational phase: Gemini with Bancolombia and the Bitpoint exchange and payment startup MOVii. Other projects involve players such as Binance and the Latin exchanges Bitso and Buda.com.
Currently, Brazil and Spain have also designed policies similar to the Colombian one. Brazil’s regulatory sandbox promotes fast and efficient payment systems, while Spain seeks to strengthen its security and compliance mechanisms.
However, Spain is also working on stepping up its crypto game. The country’s Central Bank is prioritizing the design and implementation of a CBDC on its latest development plan for 2020-2024. A little slower than its Brazilian counterpart, which plans to launch its own CBDC next year.