Colombian Financial Watchdog Says Local Firms Can Use Capital to Buy Bitcoin

The Superintendency of Corporations in Colombia has explained in an official note that companies in the country are legally allowed to buy cryptocurrencies, specifically bitcoin (BTC), to inject capital as long as they abide by local regulations.

Colombian Watchdog: Local Firms Can Use Capital to Buy Bitcoin if Companies Demonstrate Tokens Are ‘Intangible Assets’

According to the publication, the Colombian watchdog pointed out that although crypto assets usage in the financial sectors is “still” not regulated, there are no legal prohibits to inject capital via bitcoin (BTC) – the only crypto asset mentioned in the document.

However, they clarified the tokens should meet the criteria of “intangible assets,” according to the definition granted by the country’s tax watchdog to cryptocurrencies, Directorate of National Taxes and Customs (DIAN), which reads as follows:

From the patrimonial point of view, as these currencies correspond to intangible assets, capable of being valued, they form part of the patrimony and can lead to the obtaining of a (presumptive) income. According to the above, it can be concluded that virtual currencies are not money for legal purposes. However, in the context of mining activity, insofar as they are received in exchange for services and/or commissions, they correspond to income and, in any case, to goods that can be valued and generate income for those who obtain them as from be part of your patrimony and take effect in tax matters.

But the superintendency still warns Colombian companies who handle cryptos such as bitcoin should be aware of the “high risks” that it carries and “the lack of local of regulation that surrounds it.”

Companies Are Not Under Special Regulations When Converting Capital to Bitcoin

Moreover, the watchdog calls firms to abide by the principles of good faith and loyalty with their businesses when they deal with cryptocurrencies. They’re still legally liable in the case that crypto’s value suffers sudden value depreciation.

In fact, the Superintendency of Corporation reminds local companies that converting capital to bitcoin doesn’t grant them special regulations.

In the document, the Colombian entity mentioned the approval of a pilot program by the country’s government on September 22, 2020, that calls companies to test crypto transactions within the context of a regulatory sandbox approved by the superintendence.

What do you think about the current stance of local Colombian authorities towards cryptos? Let us know in the comments section below.

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