The Colombian government may seize funds from bank accounts that have been inactive for a year

The next fiscal year’s budget bill, which was just adopted by Colombia’s representative house, contains a contentious provision allowing the state to seize a bank customer’s cash for budgetary reasons. These monies may be reclaimed under specific situations stipulated by law if the account holders establish their ownership.

The new budget legislation, which was adopted last week by Colombian lawmakers in an explicit vote, includes a contentious provision that allows the government to seize a client’s cash that has been dormant in bank accounts for more than a year. The mechanism for doing so is detailed in Article 81 of the aforementioned budget legislation. It reads:

The owning financial companies will transfer the balances of checking and savings accounts that have been dormant for more than one year and do not exceed the amount of 322 UVR ($24.40). in order to fund the Nation’s General Budget Appropriations,

It shifts the compliance burden to financial institutions, which must alter their systems to comply with the new legislation. However, if the account holder becomes aware that a request for this money has been made, the authorities will be required to return the monies, together with any interest accrued, just as if the funds were stored in a depository banking institution. According to many politicians and experts, this budget measure was rushed through and did not get the necessary analysis.

Cryptocurrency as a Substitute

While the proposed item does not touch all account holders and its influence is likely to be minimal, it sparks a discussion regarding the state’s and central bank’s control over the country’s usage of fiat money. This might fuel the adoption of cryptocurrencies or other non-traditional financial products as investment and savings options.

Colombia is one of the most cash-dependent nations in Latin America, and cryptocurrency entrepreneurs are tasked with satisfying a market that desires to trade fiat cash money for cryptocurrencies. This is why the nation now has 50 bitcoin ATMs dedicated to these use cases, an exceptionally high number for a country not traditionally associated with cryptocurrencies.

It remains to be seen if these legislative measures and the advancements of bitcoin enterprises in the nation will result in a future wave of acceptance.

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