The Colombian Corporation Regulatory Agency explained in an official statement that companies in the country are legally allowed to purchase cryptocurrencies, especially Bitcoin (BTC), in order to comply with local regulations to inject funds.

Colombian Watchdog: If the company proves that the token is an “intangible asset”, the local company can use the capital to buy Bitcoin

According to the publication, the Colombian regulator pointed out that although “still” has not regulated the use of encrypted assets in the financial sector, there is no law prohibiting capital injection via Bitcoin (BTC) – Bitcoin is the only crypto asset mentioned in the document .

However, they clarified that, according to the definition given by the country’s tax regulatory agency to the National Taxation and Customs Administration (DIAN) for cryptocurrencies, the token should meet the “intangible asset” standard, which is as follows:

From the perspective of hereditary system, since these currencies correspond to intangible assets that can be valued, they form part of the hereditary system and can lead to (presumptive) income. Based on the above, it can be concluded that virtual currency is not currency for legal purposes. However, within the scope of mining activities, as long as they are obtained in the form of exchange of services and/or commissions, they are equivalent to income, and in any case are equivalent to a valueable commodity, and generate income for those who derive income from it . Part of the estate and take effect in tax matters.

But regulators still warn that Colombian companies dealing with cryptocurrencies such as Bitcoin should be aware of the “high risks” and “lack of local supervision surrounding it.”

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Companies are not subject to special regulations when converting capital to Bitcoin

In addition, regulators require companies to comply with the principles of honesty and trustworthiness in their business when handling cryptocurrencies. In the case of a sudden depreciation of the value of cryptocurrency, they should still bear legal responsibility.

In fact, company regulators reminded local companies that converting capital into Bitcoin does not grant them special regulations.

In the document, the Colombian entity refers to a pilot program approved by the government on September 22, 2020, which requires companies to test crypto transactions in a regulatory sandbox approved by regulators.

What do you think of the current position of the local government in Colombia on cryptocurrency? Let us know in the comments section below.

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