Country overview

#32
Colombia

Country stats

Rating Points
265
This indicator describes the overall rating of a given jurisdiction on several parameters according to cryptocurrency operations - market volume, crypto regulation, business climate, taxation framework.
Crypto Penetration
9.3%
Estimated percentage of crypto users out of the country's total population based on public data.
Legal Entities
0
Number of crypto companies registered in the country based on regulator data if available or other types of public data.
Regulation Points
120
An overall assessment of the granularity of crypto regulation in a given country. A high score is also given to countries where cryptocurrency transactions are highly regulated.
Amount of crypto users
4 789 500
Total amount of crypto users out of the country's total population based on public data.
Taxation points
17
This figure, according to our analysts' calculations, indicates the overall level of tax burden for cryptocurrency transactions in a given country. The higher the indicator, the lower the burden.
Market volume points
128
A rough estimate of this jurisdiction's retail crypto market relative to the rest of the world. The higher the indicator, the higher the market potential.
Status of crypto
Legally allowed
General status of cryptocurrency regulation in this jurisdiction.
Crypto payments
No info
The legal status of cryptocurrency payments for goods and services in a given country based on information from regulators, public data and feedback from our community.
Security Level
High danger
The overall level of security in a given country based on open data.
Crypto Salaries
No info
The legal status of cryptocurrency salaries to employers in a given country based on information from regulators, public data and feedback from our community.
Business Climate
No data
Overall assessment of the friendliness of this country for crypto-business. This indicator takes into account the cost of obtaining a license and the attitude towards crypto entities in the country.
Stablecoin Regulation
No data
This indicator is evaluating the regulation of stablecoins in a given country. Complex regulation means that it is possible to issue steiblcoins and obtain a license for this activity. Basic regulation means that the issuance of stablecoins is possible, but not all legal aspects are defined in the law. Standard regulation means that there is a legal practice of steylcoin circulation in a given country.
Bad Factors
No
This section describes the unfavorable economic factors for crypto-business in a given country. These are countries that are under sanctions or on the FATF grey list and other factors.
Types of licenses
Crypto-to-crypto
This license type allows VASP to provide legal exchange from one cryptocurrency to another.
Crypto-to-fiat
This type of license regulates the exchange from cryptocurrency to fiat.
Wallet/Custody
This country has a legal licensing procedure for companies that store cryptocurrency - - crypto wallet providers and custodians.
Good
Medium
Bad
intro

Colombia is the third country by population in Latin America (51.52 mln) and has a rapidly growing economy with 3,3% average GDP growth (1). Since 2021, it has crypto regulations. However, while there are many complexities in the legislation, and there is no federal law defining cryptocurrencies - only bylaws.

Security level

Colombia has a high danger security level according to our rating. Jurisdiction has 39.2 points (from 100) for safety level in Numbeo crime rating (2). The homicide level (3) is 25.4 per 100,000 inhabitants a year. Level of firearm-related death (4) 20.38 per 100,000 inhabitants a year.

Crypto Payments

There needs to be a legislative gap in crypto payments regulation in Colombia. On one hand, crypto assets are not (5) considered legal tender in Colombia. On the other hand it’s possible to treat crypto payments as payments in kind or barter transaction based on data from local media Semana (6). According to this interpretation, cryptoassets as a payment method are regulated in current legislation like other payments in kind. This includes, among other things, their taxation by local tax authority (DIAN), and to determine the tax consequences that these assets may have, their value must be converted into Colombian pesos (COP) since COP is the only currency accepted

Crypto Salaries

Currently, some individuals offer (7) cryptocurrencies as a payment method in Colombia. In this case, individuals can accept it as a barter transaction and declare it income to the Colombian Internal Revenue Service (DIAN).

Probably, a similar approach in cryptocurrency settlements with individuals is possible for awards, bonuses and options from foreign companies. If you have such information, please contact us.

Legal

The county's Federal Regulator is Colombia's Financial Superintendence (8).

Colombia’s government has released (9) draft rules for crypto companies that want to operate there several months after launching the South American nation’s regulatory “Sandbox” project in 2022.

The approach affirms that Colombia is working toward a future where citizens can buy crypto via their traditional banking accounts. Bancolombia—the country's largest bank—struck(10) a deal last December with New York-based exchange Gemini, allowing a limited number of clients to buy Bitcoin, Ethereum, Litecoin, or Bitcoin Cash from their accounts as part of a one-year pilot program. Nine Colombian banks are participating in the experiment, which was to last for one year.

The Financial Superintendence of Colombia approved (11) a regulation through Decree 1234 of 2020, with the objective that the entities supervised by this entity can adopt everything related to the controlled test space for financial innovation activities.

In December 2021, the Financial Information and Analysis Unit (UIAF) issued (12) Resolution 314, which requires crypto companies, which “exchange, transfer, custody or administration of virtual assets or exchange between virtual assets and fiat currencies” to register by UIAF. As of April 1, 2022, Bitcoin transactions greater than US$150 must be notified to the UIAF.

In 2022 Colombia’s parliament has reviewed regulation proposal (13) for crypto exchange similar to basic FATF approach, but based on our information this law wasn’t accepted. That’s why later in 2023 the parliament has debated a new bill proposal (14). Anyway, the lack of clear regulation of cryptocurrencies in Colombia as of October 2023 is confirmed by the speech (15) of the local Finance Minister Ricardo Bonilla, who spoke about the government's intention to issue a CBDC and create a transparent regulation for cryptocurrencies.

Taxation
Tax nameIndex
PIT tax Min0
PIT tax Max39
Corporate tax (CIT)35
Min Individual CGT (for crypto)15
Max Individual CGT (for crypto)35
Wealth tax Min0
Wealth tax Max0
PIT

The headline PIT rate is 39% by PWC Tax Summaries(16).

CIT

The headline CIT rate is 35% based on PWC Tax Summaries(16).

CGT

The headline corporate capital gains tax rate is 15%, according to PWC Tax Summaries(16).