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Regulation

Pro-crypto Colombian congressman highlights legalization challenges

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Mauricio Toro, Colombian congressman of the Alianza Verde party, has authored a draft bill meant to regulate the crypto industry within his country. During a recent interview with Confidential Colombia, Toro outlined some of the hurdles his proposed legislation may face.

Toro, who believes Colombia is lagging behind other nations in terms of crypto regulation, said that one of the main challenges is to make certain that the crypto industry is compliant with AML procedures. His hope is that this will bypass negative perceptions of the technology as it relates to crypto-crime.

The congressman additionally clarified that “any scenario in Colombia can be used to launder money,” not only crypto:

“What we have to guarantee is that it is not done with crypto assets or cryptocurrencies and for this, special requirements are created for those who want to establish as an exchange, where they will have to report the number of transactions per month, pay tax for the commissions, and disclosing who are the owners and their clients.”

Toro once again highlighted the “irony” that Colombia is one of the most active countries in terms of crypto transaction volume in Latin America, yet has no clear mandate with regard to regulating digital assets.

The debate around his bill’s approval has been delayed by bureaucratic issues, however, and is currently waiting for a clear stance towards crypto from Colombia’s Financial Superintendence.

This isn’t the first time the countr has made crypto headlines in recent weeks. On Sept 22, the government of Colombia approved a pilot program that called for companies to test crypto transactions within its regulatory sandbox.



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Regulation

New York authorizes first Yen stablecoin operator in the US

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New York has given the first authorization to a stablecoin backed by the Japanese Yen to operate in the U.S.

Per a Dec. 29 announcement, the New York Department of Financial Services has granted Japanese firm GMO-Z.com a charter to handle U.S.D. and Yen-backed stablecoins in New York. 

Given New York’s status as a global center, the NYDFS is the most prominent state financial regulator in the U.S. It is also one of the most aggressive. A pass to operate in New York often opens up the rest of the country. 

GMO’s charter is as a limited liability trust company rather than a full bank, the principle difference being in authorization to handle deposits. While a stablecoin operator typically needs the ability to hold reserves of the pegged asset, GMO’s charter limits its rights to hold other kinds of deposits not central to its ability “to issue, administer, and redeem” its stablecoins. 

The right to issue such non-depository charters has been a bone of contention between state regulators like the NYDFS and national banking regulators in the U.S. 

GMO president and CEO Ken Nakamura said: “We’re breaking ground with our move to issue the first regulated JPY-pegged stablecoin, which many see as a safe haven asset.” 

The NYDFS recently made changes to its famous BitLicense, including a conditional format that buddies up newly licensed firms with existing licensees. The first conditional BitLicense went to PayPal, facilitating the launch of its new crypto services earlier this fall with the help of longstanding licensee Paxos.