Even though bitcoin is not a legally established currency in Colombia, it is being highly used.
Bitcoin is a cryptocurrency (a means of digital exchange) characterized by being decentralized, which means that it is not backed by any government or central bank and it lacks legal security, transactions do not need intermediaries and it has an open source protocol, in other words, it is based on open collaboration.
According to LocalBitcoins, 2017 was the year of bitcoin in Colombia because the transactions of this cryptocurrency in the country grew by 1,200%. Such growth led the company to rank Colombia as the third country in which the purchase and sale of this currency grew the most, after China and Nigeria.
LocalBitcoins confirmed that the ranking figures are based on the type of currency used for a transaction and not necessarily related to the country where the exchange takes place, which means that Colombian pesos could be used to make large transactions in different parts of the world.
Despite the great rise of cryptocurrency, the Colombian government insists that bitcoin is not a valid or legal currency within the national territory. However, private transactions have not declined, a situation that has drawn the attention of authorities, who fear that behind these large financial movements illicit activities derived from drug trafficking or money laundering may be concealed.
The phenomenon of cryptocurrency has grown so much that there are currently institutions holding workshops and seminars on the way to use it, as is the case of Investopi, a financial education platform based in Bogotá, which suggests that the growth of bitcoin in Colombia is mainly due to the high banking costs of international transfers and the great difficulty carrying them out involves.
Marcelo Granada, director of Investopi, explains that people of all ages and strata participate in the use of the cryptocurrency, with the majority of them being investors between the ages of 25 and 44, according to a survey carried out by the entity.
The research center in markets and digital trends Juniper Research, based in the United Kingdom, states that the phenomenon seen in Colombia is replicated in other growing economies. As explained by Windsor Holden, director of Forecasting and Consulting of the center, there is a considerable increase in the use of cryptocurrencies in several markets, mainly due to the increase in their value.
Holden also said that the rapid growth of bitcoin in Colombia makes it necessary to establish a series of regulations, taking into account the type of transactions that can be made and how difficult it is to trace the resources.
The Colombian government, through the Ministry of Finance, is aware of the rapid growth of the cryptocurrency in the country, so they believe it is necessary to monitor their development and also warn about the possibility of embezzlement, fraud and fraudulent business that can be performed using the bitcoin.
Latin American Post | Andrea del Pilar Rojas Riaño
Translated from "Colombia: el país de Latinoamérica donde más crece la compra y venta de bitcoins"