The launch of cryptocurrency ATMs in Colombia is crucial for crypto adoption in a country where cash reigns supreme. The adoption of cryptocurrency in Latin America has been accelerated by El Salvador’s recent adoption of bitcoin as legal cash. Colombia led the field in terms of ATMs in Latin America before El Salvador and was second only to Venezuela in Chainalysis’ 2020 global crypto adoption index.
In April 2021, the government recognized that the rise of cryptocurrencies could not be ignored as frauds multiplied and that they needed to exercise caution. Since 2020, the writing has been on the wall; Chilean exchange Buda.com reported $31.1 million in trading volume in Colombia. Between January and March 2021, the trade volume approached $40B.
The government experimented with cryptocurrencies to the point of establishing regulatory sandboxes between banks and nine crypto exchanges, like to Pakistan, and issued crypto tax and anti-money laundering rules. Jehudi Castro, the Presidency’s digital transformation advisor and a member of the sandbox assessment group, said that prohibiting crypto would be futile. He said that it is preferable for them to collect data first and then adopt legislation progressively.
What is the reason for the growth of ATMs?
Of the fifty ATMs in Bogota, six are in Medellin, three in Bucaramanga, and three in Pereira, while the remainder is spread across the city, including at least one in Armenia, Barranquilla, Cartagena, Cucuta, and La Hormiga.
Alejandro Beltran, CEO of Buda.com, stated that Colombia has remained a significant crypto transaction hub, and given Venezuela’s position in the top three of the global adoption index and proximity to Colombia, the increase in ATMs could be attributed to crypto transaction interactions with Venezuela. Alternatively, he added, the crypto ATMs might be making certain financial transactions more efficient than cash could.
Colombia is apart from other South American nations in that its acceptance of cryptocurrency was not precipitated by political and economic turmoil. Argentina, for example, has been suitable for bitcoin adoption due to cycles of devaluation, default, hyperinflation, and a three-year recession. Foreign miners have flocked to the area, attracted by the $0.06/kWh power cost for industrial clients. In Venezuela, the bank closures caused by the coronavirus outbreak pushed people toward digital asset adoption, as did the country’s soaring inflation.
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