Central Bank of Colombia Says 'Bitcoin is Not a Currency'

Colombia issued its latest guidance on bitcoin on 1st April, clarifying its classification of the digital currency.

AccessTimeIconApr 1, 2014 at 9:57 p.m. UTC
Updated Sep 11, 2021 at 10:36 a.m. UTC
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On Tuesday, 1st April, Banco Central de Colombia, the central bank of the South American nation, issued new statements regarding bitcoin, confirming that the digital currency is not considered a currency or a means of legal tender in the country.

The news comes roughly one week after the Superintendencia Financiera de Colombia (SFC), the government body with jurisdiction over the Colombian financial system, issued a ruling that domestic banks would be barred from holding, investing in or brokering bitcoin transactions.

Said the central bank, according to reports:

"The bitcoin is not a currency in Colombia and, therefore, not a means of payment of unlimited legal tender with a discharge power. Then there is no obligation to receive it as a means of fulfilling the obligations."

The central bank also reiterated the SFC's 26th March finding that bitcoin does not meet the definition of a currency because it is not backed by a central bank.

Bitcoin discussions continue

Colombia has been increasingly active on matters relating to digital currencies in recent weeks, following the 20th March rumours that the SFC would move to ban bitcoin transactions altogether.

This report later turned out to be exaggerated, as Colombia issued guidance similar to that originally posed by China and Mexico, barring its banks from interacting with the sector.

Speaking to CoinDesk, members of the local Colombian digital currency community were optimistic at the time that this represented a first step in relations between regulators and local enthusiasts.

Community reaction

Roman Parra, CEO and founder of Colombia-based bitcoin buying and selling service Bitcoin Suramérica, confirmed the statements were a continuation of past guidance. However, Parra found them particularly troubling given that they represent what he considers a lack of interest from the government in developing or building the local bitcoin ecosystem.

Still, he notes, the question of whether bitcoin is money in Colombia does have an impact on local business.

According to Parra, as in much of the world, it's still unclear how bitcoin transactions completed in Colombia should be treated for tax purposes.

Explained Parra:

"We are trying to find out the best way to handle this legal topic. At the present time we are acting like a commerce company."

Bitcoin in South America

Research from BitLegal suggests that only a few South American governments have spoken out about bitcoin and digital currencies. Its records show Colombia. Brazil and Argentina have all issued guidance to their local communities.

Further research from the US Law Library of Congress indicates Chile has also issued formal statements.

However, even countries that haven't addressed digital currencies, such as Venezuela, have seen a recent rise in bitcoin enthusiasm, suggesting more countries in the region may need to follow suit.

Bogata cathedral image via Shutterstock


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