The budget law for next year, which was recently approved by the Colombian House of Representatives, includes a controversial article that allows the state to confiscate a bank customer’s funds for use for budgetary purposes. In certain circumstances defined by law, these funds could be recovered if the account holders prove their ownership.
Colombian government hungry for unused funds
The new budget law, which was approved last week by an express vote of Colombian lawmakers, introduced a controversial change, allowing the government to take a client’s funds that have been inactive in bank accounts for more than a year. Article 81 of the aforementioned budget law details the procedure followed to do so. It is said:
The balances of checking or savings accounts inactive for more than a year and not exceeding the value equivalent to 322 UVR ($ 24.40), will be transferred by the holding financial entities … General Budget of the Nation,
It places the burden of compliance on financial entities, which will have to adapt their systems to comply with this new regulation.
However, if the account holder becomes aware that a request has been made for these funds, the authorities will have to repay the funds with accrued interest, as if the funds were held in a depositary financial institution. For many representatives and analysts, this finance law was rushed through and was not analyzed with the necessary depth.
Cryptocurrency as an alternative
While the proposed article does not affect all account holders and its impact may be rather small, it initiates a debate on the power of the state and central banks over the use of fiat money in the country. . This could encourage the use of cryptocurrencies or other alternatives to traditional financial instruments as investment and savings tools.
Colombia is one of the countries in the Latin American region that uses the most cash, and cryptocurrency companies are tasked with trying to satisfy this market that seeks to exchange fiat money. against cryptocurrencies. That’s why there are already 50 cryptocurrency ATMs in the country to target these use cases, an unusually high number for a country that hasn’t been known for its appeal to cryptocurrency.
It remains to be seen whether these government measures and advances by cryptocurrency companies in the country can spur a wave of adoption in the future.
What do you think of the Colombian budget law giving access to the government to seize user funds? Tell us in the comments section below.
Image credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. This is not a direct offer or the solicitation of an offer to buy or sell, nor a recommendation or endorsement of any product, service or business. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or allegedly caused by or in connection with the use of or reliance on any content, good or service mentioned in this article.