Colombia’s demand for cryptocurrency far outweighs that of other South American countries, according to a BBC article from earlier this year.
The article lays out two main reasons for the growing demand, namely the desire of Colombians to have readily available short-term liquidity options, and, for reasons which may be indicative of Colombia’s most well known black market export, the desire for the anonymity that cryptocurrency brings.
Colombia hasn’t quite embraced cryptocurrency as readily as other South American nations, but interest in the sector is growing rapidly, and Colombians are already calling for blockchain tech to be used in the country’s electronic voting system.
Unlike in Argentina, where rising fiat inflation could feasibly push citizens towards increased crypto use, Colombia’s inflation rate has been relatively stable and currently stands at its lowest level since 2014.
Yet even amid financial stability, cryptocurrency has still managed to find itself as a valued commodity in Colombian life. According to this article from WorldCrunch.com, the value of 2017’s cryptocurrency trades in Colombia was almost the same amount as the country’s tourism industry – at just over 2% of GDP.
At the same time, cryptocurrency use on the LocalBitcoins exchange alone grew by an astounding 1200% last year, reaching peak popularity in December (for obvious reasons). However, the growth hasn’t ceased, and despite January’s crash the desire for crypto continues to thrive in Colombia.
Moves in the Senate
Earlier this month, Colombian Senator Antonio Navarro Wolff of the Green Alliance championed the crypto cause in Colombia and called for blockchain to be explored as a tool which could be used to bolster the Colombian economy.
Mr. Wolff appealed to the need to keep up with the competition and pointed out cryptocurrency’s ease of use. He said:
“It is necessary to proceed in the issue of cryptocurrency, to be at the same level of the countries that use this technology. Nowadays it is impossible to alter it (the blockchain), an international transfer can be done with the same ease as sending an email.”
However, Senator Wolff was also quick to point out the technology’s potential for use by illegal operators and called for the Colombian Ministry of Finance to get to work on finding a regulatory system for cryptocurrency, but not to the point where it would impede on its common usage:
“Regulation is required to protect the consumer and users. In many countries cryptocurrency has been created to capture money, regulation should not prevent the use and development in the country.”
In May, the Colombian Blockchain Association was formed in an attempt to increase the efficiency of blockchain’s rollout across the country. The initiative is made up of a collection of tech companies, both Colombian and otherwise, and includes: RSK, Buda Colombia, Cajero.co, Bitcoin Colombia, Panda Group and IntiColombia.
As of this moment, there are eleven crypto exchanges open for use by Colombians, including CEX.io and Coinmama.
The LocalBitcoins exchange is also open for custom in Colombia and saw a 1200% increase in its usage by Colombians throughout 2017. This puts Colombia third on the list of the world’s fastest-growing crypto adopters, coming in behind China and Nigeria in terms of yearly growth.
Despite the nation’s rapid rate of crypto adoption, The Buda.com exchange had its accounts closed down by the Colombian state bank this month, which led to anxiety about the future condition of cryptocurrency in the country.
However, as Bloomberg have pointed out, cryptocurrency actually tends to thrive in nations where it is regulated and/or oppressed the most. So whatever happens in the coming months, the road is open for crypto to continue its drive throughout the República de Colombia.