The Financial Superintendence of Colombia (also Superintendencia Financiera de Colombia – SFC) has published a new virtual assets service providers (VASPs) regulation proposal.
In the draft, the SFC outlined compliance requirements that regulated banks looking to allow their clients to link their accounts directly with digital assets firms that are not regulated by it must follow.
For one, before allying with any VASPs, banks must ensure that the firm is registered under the Online Reporting System of the Financial Information and Analysis Unit (UIAF). The VASPs should also have AML/CFT measures and risk management tools in place; have the technological and operational capacity to monitor, record, and transmit transactions with virtual assets; and submit mandatory reports to the central bank.
Having linked with the VASPs, banks are also mandated to ensure that the names of their clients match on both platforms and provide consumers with adequate information on the risks involved in investing in digital assets.
“In this sense, the supervised entities must have mechanisms that allow validating that the financial consumer knows and is sufficiently informed regarding the risks of the operation of buying and selling virtual assets and the role of the supervised entity in this operation,” the draft said.
The proposal is open to the public for comments until August 12, 2022, per the notice on the SFC’s website. A form is provided for the filing of comments.
Colombia expanding digital assets regulations to accelerate adoption
Notably, the proposed regulation is a follow-up of norms first approved in 2020 as part of an experimental regulatory regime in Colombia.
Called the digital assets regulatory “Sandbox,” the experiment which kicked off in 2021 has seen as many as 10 banks form alliances with local and international digital assets exchanges to allow their clients to link their accounts.
Under the project, Colombia’s biggest bank Bancolombia struck a deal with New York-based exchange Gemini. Binance also clinched a deal with Davivineda, Colombia’s third largest bank, to allow clients to buy a limited number of digital assets directly from their bank accounts.
Meanwhile, lawmakers in the Latin American country have also introduced a digital assets regulation bill that will see VASPs adopt a new registration regime. According to Reuters, Mexican exchange Bitso has been one of the first firms to receive its operating license in Colombia under this regime.
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