Colombia - Binance starts up crypto pilot with Davivienda ahead of presidential elections
The trading platform is part of Colombia's crypto regulatory sandbox.
Colombian bank Davivienda and cryptocurrency exchange platform Binance started operating a pilot project under which users will be able to perform cash-in and cash-out operations with Bitcoin (BTC), Ether (ETH), Litecoin (LTC) and Bitcoin Cash (BCH).
In contrast to other Latin America jurisdictions, Colombia did something different with its crypto policy. It chose to link banks with exchanges and pilot crypto transactions before introducing the newly-minted sector to the public. With the pilot closely stewarded by the Superfinanciera de Colombia (SFC), the financial markets regulator, the idea here is that the Duque administration wants to gain investor confidence that might be deteriorating in other less clear frameworks - like Mexico.
Binance made Maximiliano Hinz its Latin America director in January 2022. Argentine Hinz was named to the post shortly after Ricardo da Ros left Binance Brazil with only six months into the job.
The risk for exchanges like Binance and Gemini (who is partnered with Bancolombia), is that outsider candidate Gustavo Petro could drag crypto and the banking sector into the electoral battle ahead of elections. The formal regulations for exchanges were supposed to be introduced in March 2022. But one source suggested that the SFC might extend the regulatory pilot by another six to nine months to dodge May presidential election drama.
One of Petro’s main grievances is the country’s banking sector, which he views as oligopolistic and exclusive. If Petro wins the election, he will have executive control over the regulator and therefore the sandbox. So far, the candidate does not seem focused on meddling with it, but we will really need to see how his banking policy materializes in the months ahead to see how threatened these exchanges could be.