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Bancolombia, Colombia’s largest bank launches stablecoin, crypto offering

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Earlier this month, the Bancolombia group unveiled Wenia, its innovative cryptocurrency offering. Given that Colombia is Latin America’s third most populous country after Brazil and Mexico, Wenia has the potential for significant reach. The bank aims to target 60,000 users in its first year. Besides offering cryptocurrencies, Wenia is launching its own stablecoin, COPW, which will be backed 1:1 by the Colombian Peso.

Unique Regulatory and Operational Framework
One of the distinctive aspects of Wenia is that it will not be regulated in Colombia. Although it primarily targets Colombian citizens, Wenia is registered in Bermuda and holds a license from the Bermuda Monetary Authority. The service’s website emphasizes its independence from Bancolombia, describing itself as “an idea of Grupo Bancolombia.”

“Our purpose is to help people connect with the crypto side in a more accessible, inclusive, and efficient way,” said Pablo Arboleda, CEO of Wenia.

Colombia’s Crypto Landscape
According to Chainalysis, Colombia ranks as Latin America’s fourth most crypto-active country, following Brazil, Mexico, and Argentina. Although Argentina’s economic challenges have spurred greater crypto adoption, Colombia remains a significant player in the region’s crypto ecosystem.

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While Colombians generally cannot hold US dollar bank accounts, Wenia plans to support the USDC stablecoin alongside Bitcoin, Ether, and Polygon’s Matic. Despite the relative stability of the Colombian peso exchange rate in recent years, the introduction of the COPW stablecoin could offer a new dimension of financial stability and flexibility.

COPW Stablecoin: Conventional Backing and Blockchain Integration
The COPW stablecoin will be issued on the Polygon blockchain, backed by deposits and other assets, including treasuries. Unlike tokenized deposits, COPW represents a conventional stablecoin model, aligning with Wenia’s independent positioning. Wenia has partnered with Alphapoint to provide the necessary technology for crypto trading.

Colombia’s Blockchain Initiatives
Colombia has been proactive in the blockchain space. The central bank is trialing Ripple’s technology for high-value payments, and the Bolsa de Valores de Colombia (bvc) is exploring blockchain for its digitally native crowdfunding platform, a2censo.

Wenia’s launch by the Bancolombia group marks a significant step in Colombia’s evolving crypto landscape. By targeting a substantial user base and introducing the COPW stablecoin, Wenia aims to enhance financial inclusion and accessibility. Its unique regulatory approach and strategic partnerships position it well to navigate the dynamic crypto market in Colombia and beyond.

Source: ledgerinsights.com

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Europe Tax Advisory Market Valuation Poised to Soar to USD 28.50 Billion By 2032 | Astute Analytica

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Blockchain

Brazil to Tighten Regulation on Foreign Crypto Exchanges

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Brazil’s Receita Federal Increases Scrutiny on Foreign Cryptocurrency Exchanges

Brazil’s tax authority, Receita Federal, plans to intensify its oversight of foreign cryptocurrency exchanges operating within the country. This move aims to enhance regulation and transparency amid the rising use of digital assets in Latin America’s largest economy.

New Reporting Requirements for International Platforms
Recent reports indicate that Receita Federal will soon issue an order requiring international cryptocurrency platforms, including Binance and Coinbase, to provide detailed operational data and information on their partnerships with local service providers.

Government’s Regulatory Focus
Andrea Chaves, Deputy Secretary of Inspection at the Federal Revenue Service, emphasized the importance of this measure. “It’s crucial for us to understand how they operate here and ensure there’s no illegality,” she stated. The government aims to ensure compliance with tax laws and confirm that services provided to Brazilian customers are fully legal.

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Wagner Lima, a risk management coordinator at Receita Federal, underscored the need to review collaborations between foreign exchanges and local service providers. This review ensures compliance with a 2019 regulation that mandates information sharing.

Rise in Crypto Asset Declarations
This decision comes in response to a significant increase in crypto asset declarations by Brazilians. From January to July 2023, Brazilians declared 133.6 billion reais ($24.6 billion) in crypto assets, marking a 36.6% increase from the previous year. Notably, 14.5 billion reais were declared through foreign exchanges, representing a 51.2% growth.

Upcoming Order Details
The forthcoming order will require exchanges to disclose their operational methods and customer service practices in Brazil. However, it will exclude customer-specific data and transactional information to comply with current Brazilian laws.

Future Regulatory Framework
Brazilian authorities are also working on developing a clear framework for digital currencies and their legal status, expected to be introduced by mid-2024. This framework aims to organize both local and foreign exchanges operating within Brazil, ensuring their compliance with local laws and regulatory requirements.

Source: cryptotimes.io

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Financial Institution NAB Embraces Crypto Custody Solution

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National Australia Bank Invests in Crypto Custody Firm Zodia Custody

National Australia Bank (NAB), a prominent financial institution, has taken a significant step into the cryptocurrency custody arena. Instead of creating its own digital currency, NAB Ventures has opted to invest in Zodia Custody, a London-based firm specializing in the secure storage of digital assets for institutional clients.

Strategic Shift and Industry Alignment
This investment marks a strategic shift for NAB, aligning itself with global financial leaders like Standard Chartered, Northern Trust, and SBI Holdings, who have already acknowledged the importance of safeguarding digital assets for investors. By partnering with Zodia Custody, NAB showcases a forward-thinking approach, choosing collaboration over direct competition with established players like Coinbase.

Commitment to Innovation
The decision to invest in Zodia Custody reflects NAB’s commitment to providing cutting-edge solutions to its institutional clients while leveraging the potential of the crypto market. This move positions NAB as a key ally for institutional investors seeking secure and regulated infrastructure to navigate the complexities of digital asset storage and management.

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Additional Insights
One significant aspect not highlighted in the initial report is that NAB’s engagement with a crypto custody solution underscores the growing demand from institutional investors for secure and regulated infrastructure to enter the crypto space.

Key Questions
1. How will NAB’s partnership with Zodia Custody impact its overall financial services and competitive position in the market?
2. What regulatory challenges and compliance requirements does NAB face by entering the crypto custody space?
3. How does NAB plan to address security concerns related to the storage of digital assets for its institutional clients?
4. What are the potential risks and rewards for NAB as it ventures into the crypto custody sector?

Key Challenges
NAB may encounter several challenges, including regulatory compliance issues, cybersecurity risks, market volatility of crypto assets, competition from existing players in the space, and the need to build trust among institutional clients for their crypto custody services.

Advantages
1. Access to a Growing Market: Entry into the rapidly expanding crypto market and potential new revenue streams.
2. Strengthened Partnerships: Enhanced relationships with global leaders in the crypto custody sector.
3. Diversification: Broadening service offerings to meet the evolving needs of institutional clients.

Disadvantages
1. Regulatory Scrutiny: Increased regulatory oversight and compliance costs.
2. Market Volatility: Exposure to the highly volatile nature of crypto assets.
3. Reputation Risk: Potential damage to reputation if security breaches or operational issues occur in the custody of digital assets.

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Source: smartphonemagazine.nl

The post Financial Institution NAB Embraces Crypto Custody Solution appeared first on HIPTHER Alerts.

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