Colombia

Colombia’s legal system experiments in the metaverse: Report

Colombia has positioned itself at the forefront of innovative ways to conduct legal proceedings after recently hosting a trial in the metaverse.

A Colombian court recently hosted its first legal trial in the metaverse, with the court magistrate saying it felt “more real than a video call,” according to a recent report.

According to a Reuters report published on Feb. 24, Colombia’s Magdalena Administrative Court held a court case in the metaverse on Feb. 15 involving participants in a traffic dispute.

The case lasted two hours and was brought by a regional transport union against the police, and will progress “partly” in the metaverse. The verdict could also be given in the metaverse.

The participants appeared as avatars in a virtual courtroom, with Magistrate Maria Quinones Triana dressed in black legal robes.

It was noted that Columbia is one of the first countries in the world to test legal proceedings in the metaverse, with Quinones telling Reuters that it felt more “real than a video call.”

This comes after a recent survey released by CoinWire on Jan. 16 found that 69% of respondents believe that the metaverse will eventually modify social lifestyles due to new approaches taken for entertainment and activities.

Cathy Hackl, author of Into the Metaverse: The Essential Guide to the Business Opportunities of the Web3 era, told Cointelegraph on Jan. 31 that the “physical world side” of the metaverse will “come in the next 10 years.”

Hackl added that if that is considered, then how we “socialize will be deeply impacted by the metaverse

In January this year, the World Economic Forum boasted metaverse experiences. The conference allowed delegates to experience the forum in its own 3D immersive digital sessions called the “Global Collaboration Village.”

The driving forces behind crypto adoption in Latin America in 2022

Inflation has fueled crypto growth in the region, stimulating asset tokenization and remittance infrastructure development.

Inflation, cross-border payments, assets tokenization and nonfungible tokens (NFTs) were among the major drivers for crypto adoption across Latin America in 2022, sources in the region told Cointelegraph, with exciting examples of progress across many countries.

Latin America made up 9.1% of the global crypto value received in 2022, reaching $562 billion between July 2021 and June 2022 — representing a growth of 40% in the period. Four Latin American countries ranked among the top crypto adopters in the latest Chainalysis Global Adoption Index.

Major developments have contributed to these results over the past 12 months. Authorities have been working on central bank digital currencies (CBDCs), implementing standards for business operations and clarifying regulations. Meanwhile, many companies in Latin America have been exploring ways to utilize blockchain technology and digital assets to solve the various challenges that countries in the region face.

“The region is ripe with opportunities for cryptocurrency adoption,” noted a spokesperson for cryptocurrency exchange Bitso, which operates in Brazil and Argentina, among other countries in Central America, adding that:

“For both Argentina and Colombia, the impacts of inflation have driven many to use cryptocurrency. […] For Colombia, remittances are another significant driver of adoption, even surpassing coal as a driver of dollar revenue in 2022 according to a Banco de Bogotá report.”

Crypto Latam

Institutional adoption and regulatory developments have paved the way for Mercado Bitcoin to issue Brazil’s first stablecoin, the MBRL, which is backed one-to-one by the Brazilian fiat currency through a partnership with Stellar. The country’s central bank is scheduling for 2023 the test of its digital currency, and for 2024, its full release to over 200 million people. Also, a recently approved bill will regulate virtual assets providers after years of discussions in Congress.

“Brazil has been a major player in the crypto economy story in Latin America for several reasons: institutional adoption, regulatory advances, and general public buy-in. In that sense, public sector involvement is inevitable — this represents an extremely positive move, which enhances the crypto-active industry while providing greater security for investors,” noted Fabrício Tota, director at Mercado Bitcoin.

Colombia also plans to introduce its digital currency, aiming to increase transparency and prevent tax evasion, which is estimated to account for nearly 8% of the country’s gross domestic product. In Chile, the central bank has delayed plans for the issuance of the digital Chilean peso for a deeper analysis of benefits and risks.

To fight inflation in Argentina, cities such as Buenos Aires and Mendoza started accepting cryptocurrencies for tax payments. At the same time, Santa Fe Province plans to implement crypto-mining activities to raise funds for rail infrastructure upgrades. These may be timely initiatives given that Argentina’s inflation rate is forecast to be 73.5% at the end of 2022, according to FocusEconomics panelists.

“Argentina is becoming a hub for bringing tech development and resources to Latin America from the rest of the world,” said Ryan Dennis, senior manager at Stellar Development Foundation. “This naturally flows into blockchain development with a large number of startups in the country and thus a growing number of developers and founders working together in blockchain and crypto.”

Tokenization

Latam’s crypto space has also benefited from the tokenization of investment products, allowing many to access products that were previously only available to large investors. “Tokenization of digital assets has been growing over the past years,” including assets such as corporate bonds and real estate debts, noted Dennis.

Another reason contributing to the rise of tokenization of financial assets is the high-interest rates in the region. Most Latin American countries have double-digit interest rates, which prompts investors to seek assets with predictable returns and less volatility. This is an ideal scenario for financial companies working on tokenization and decentralized finance (DeFi) solutions.

Music and art tokenization are also trending in Latin America. “One revolution that has happened in LatAm is giving artists a window into the world of Web3,” Dennis explained. “There are a lot of artists that have been able to get out of their local communities and country to become internationally renowned. That’s huge.”

Crypto industry challenges in the region are similar to those seen worldwide: A lack of education about blockchain technology, insufficient regulation, and a deficit of trust. “The firms and projects that will lead the crypto in Latin America next year will be the companies thoughtfully addressing the need for increased transparency and trust,” noted Bitso’s spokesperson.

Fed teases master accounts for crypto banks: Law Decoded, Aug. 15-22

The new guidelines from the Federal Reserve hold a prospect of “the most stringent review” for non-federally insured institutions.

Last week, the United States Federal Reserve Board turned its eye to banks and crypto, making (or promising to make) several clarifications, one of them pretty long-awaited. It announced that the final version of guidelines for reserve banks to access Reserve Bank master accounts and services is ready.

For crypto, these guidelines hold a prospect of “the most stringent review,” to which non-federally insured institutions that do not have a holding company subject to Fed oversight would be exposed. It is still unclear whether the crypto banks will finally get access to master accounts under the new guidelines and how long they shall wait for it.

At the same time, the Fed made itself clear that the traditional banks that intend to deal with crypto assets couldn’t do it without a closer consultation with regulators. Before taking such a decision, it is recommended to check state and federal laws and notify the Fed supervisory contacts in advance.

European Central Bank steps up to crypto licensing discussion

It was not only the U.S. financial regulator that had a busy last week. The ECB laid the foundation for the criteria it would be considering when harmonizing the licensing requirements for crypto in Europe. Specifically, it will consider crypto firms’ business models, internal governance and “fit and proper” assessments which apply to licensing other companies. In addition, it will rely on national Anti-Money Laundering (AML) authorities and the financial intelligence units of respective countries to provide data necessary to assess potential risks.

A cease and desist letter for FTX

The Federal Deposit Insurance Corporation has issued cease and desist letters to five companies — FTX US, SmartAssets, FDICCrypto, Cryptonews and Cryptosec — for allegedly making false representations about deposit insurance related to cryptocurrencies. The agency alleges that these organizations misled the public about certain cryptocurrency-related products being insured by FDIC and urges them to “take immediate corrective action to address these false or misleading statements.”

Colombia hopes to prevent tax evasion with national digital currency

The head of the Colombian Tax and Customs National Authority, Luis Carlos Reyes, claimed that the government would seek to create a digital currency to prevent illicit financial activity like tax evasion. However, the official did not specify what kind of digital currency exactly the Colombian government will be looking to launch, a central bank digital currency (CBDC) or rather an asset-backed national currency similar to Venezuela’s Petro digital currency project.

CBDCs are “the only solution”

The introduction of digital cash in the form of CBDCs appears to be the “only solution” that will guarantee a “smooth continuation” of the current monetary system. At least, that is what the ECB experts believe, gathering insights from 150 academic papers on the subject. The importance of central banks achieving the right level of CBDC “take-up” is stressed, and the authors also looked at potential regulatory action that could help CBDCs achieve their goals. Previously, the central bank compared the cross-border payment potential of CBDC, Bitcoin and stablecoin, coming out in favor of CBDC.

Colombia to prevent tax evasion with national digital currency: Report

A national digital currency would help curb tax evasion in Colombia, which is estimated at up to 8% of GDP, the head of Colombia’s tax and customs agency said.

AmColombia’s economic growth beat expectations in the second quarter, an official at the country’s tax and customs agency has hinted at some national digital currency plans.

Luis Carlos Reyes, the head of the Colombian Tax and Customs National Authority, claimed that the government of newly inaugurated Colombian President Gustavo Petro will seek to create a digital currency to prevent illicit financial activity like tax evasion.

Colombia’s digital currency plans are part of the country’s new monetary policy measures aiming to increase transparency of financial transactions, the official said in an interview with the local magazine Semana. According to the report, tax evasion in Colombia is estimated to account for 6% or 8% of the country’s gross domestic product so far.

Reyes also pointed out that a potential digital currency would be a major benefit for user experience, stating: “The creation of a digital currency would make these transactions easier for the consumer.”

The official did not specify what kind of digital currency exactly the Colombian government will be looking to launch, a central bank digital currency (CBDC) or rather an asset-backed national currency similar to Venezuela’s Petro digital currency project.

Hernando Vargas, technical deputy governor at the central bank of Colombia, previously considered the implications of a retail CBDC in Colombia earlier in 2022. The official noted that cash is the preferred instrument of low-cost payments in Colombia, pointing to potential threats from cryptocurrencies and stablecoins in certain circumstances. He stated:

“A line of defense against a widespread use of cryptocurrencies and stablecoins is weaker in Colombia than in other jurisdictions and the discussion about the adoption of a retail CBDC becomes particularly interesting.”

The news comes shortly after new Colombian president Petro has sworn into office on Aug. 7. As previously reported, Petro is known for expressing support for cryptocurrencies like Bitcoin (BTC). Back in 2017, Petro suggested that BTC could remove power from the government and return it to the people. “Virtual currency is pure information and therefore energy,” Petro said at the time.

According to the latest reports, Colombia’s economy beat expectations in the second quarter in a boost for Petro’s government, with GDP reportedly rising 12.6% versus the expected 12.1% growth.

BNB Chain aims to raise 30K new Web3 developers across Latin America in 2022

BNB Chain prepares to launch a Web3 development course for Latin American students as the region continues to be a hub for adoption and crypto-related activity.

BNB Chain, a blockchain network created by crypto exchange Binance, and Latin America-focused education platform Platzi announced that they will be launching a Web3 development course for the region.

By the end of the year, the course aims to be accessible to 30,000 students. Gwendolyn Regina, investment director at BNB Chain, told Cointelegraph that this course focuses on growing the skills of developers.

“This is going to be the major educational resource available in Spanish for Web2 developers to build on Web3 with BNB Chain.”

This development is an effort to push wider adoption of blockchain technology and Web3 education in the region. Generally, the greatest barriers of entrance into the industry are accessibility and education, along with unclear regulations from local governments.

Even among those who have already purchased crypto, the understanding of how the technology works is often misunderstood. According to a survey from the Motley Fool, nearly 10% of respondents who own crypto said they don’t understand how it actually works.

Therefore, education is key. It’s even more important in regions like Latin America, where crypto has the potential to empower the local population outside of traditional, messy financial institutions. Regina told Cointelegraph:

“If we increase the accessibility to resources to build Web3 tools on BNB Chain, we can significantly support the development of the region.”

In El Salvador, the first country to make Bitcoin legal tender, efforts to educate the general public on crypto are underway. The country introduced a grassroots diploma program called Mi Primer Bitcoin, or “My First Bitcoin,” which aims to increase crypto literacy among young people.

To encourage participation in the new BNB Chain course, those attending the BNB Chain Developer Camp this September in Bogota, Colombia, will have a chance at a limited number of scholarships for the new online course.

Latin America is a growing hub for innovation and adoption of crypto and Web3 developments. Earlier this month, Binance and Mastercard released prepaid crypto cards in Argentina.

“Latin America needs to balance the retail experience with the building potential. There’s a big community that knows about crypto and its utility by daily experience,” says Regina.