Colombia Banking Ban on Crypto Transactions: What You Need to Know in 2025

Colombia doesn’t ban crypto. But if you try to use your bank account to buy Bitcoin, trade Ethereum, or send USDT, you’ll hit a wall. That’s because Colombia’s banking system is legally blocked from touching cryptocurrency-not because it’s illegal, but because the regulators won’t let financial institutions get involved.

What the Ban Actually Means

The Financial Superintendency of Colombia (SFC) issued clear rules in 2022: banks, credit unions, payment processors, and any other supervised financial entity cannot hold, invest in, or process crypto transactions. That means no deposits, no withdrawals, no crypto wallets linked to your savings account, and no crypto investment products offered by Bancolombia, Davivienda, or any other bank.

It’s not a total ban on crypto. You can still buy and sell Bitcoin on exchanges like Wenia or Binance. You can hold it in a self-custody wallet. You can even use it to pay for goods if a merchant accepts it. But if you want to move money between your bank and your crypto wallet, you’re out of luck. The bridge is gone.

The SFC’s reasoning? Risk. They see crypto as a potential tool for money laundering, tax evasion, and terrorist financing. Their rules require all Payment Service Providers (PSPs) to collect full sender and recipient data for any crypto transaction over $150-and report anything suspicious to the Financial Information and Analysis Unit (UIAF) in real time. That’s stricter than many other countries.

How This Affects Everyday Users

For regular Colombians, this creates real friction. Imagine you earn crypto from freelance work abroad. You want to cash out to pay your rent or buy groceries. You can’t link your exchange account to your bank. You have to use peer-to-peer platforms like LocalBitcoins or Paxful, where you meet someone in person or use a third-party payment processor. It’s slower, riskier, and often more expensive.

Some users report being flagged by their banks for “suspicious activity” just because they made a transfer to a known crypto exchange-even if the transfer was for a legal purchase. Banks, afraid of fines, have become overly cautious. One user in Medellín said his account was frozen for three weeks after sending $200 to a crypto platform. No proof of wrongdoing, just suspicion.

And if you’re a freelancer or small business owner who gets paid in crypto? You’re stuck. You can’t pay your employees via payroll systems. You can’t automate bill payments. You’re forced into cash-based workarounds or expensive third-party services that charge up to 8% in fees to convert crypto to pesos.

The Institutional Paradox

Here’s where it gets confusing: Colombia’s biggest bank, Bancolombia, launched its own crypto exchange called Wenia in 2024-and even created its own stablecoin, COPW, pegged to the Colombian peso. How is that allowed if banks can’t touch crypto?

The answer lies in a loophole. Bancolombia operates Wenia as a separate legal entity, not under the SFC’s banking supervision. It’s a fintech, not a bank. That means it doesn’t have to follow the same rules. But here’s the catch: Wenia can’t link directly to Bancolombia accounts. Users still have to move money through third-party gateways, often using P2P or cash deposits.

This isn’t innovation-it’s a workaround. The same bank that tells you “no crypto” is quietly building a crypto business under a different name. Critics call it hypocrisy. Supporters say it shows the market is too strong to ignore.

How Colombia Compares to Neighbors

Colombia isn’t alone in Latin America, but it’s one of the most restrictive.

- Brazil passed full crypto tax laws in 2024, effective January 2025. You pay taxes on gains, but you can trade freely through banks.

- Chile approved three licensed crypto custodians in early 2025. Banks can hold crypto for clients under strict rules.

- Mexico expanded its Fintech Law in 2024 to include crypto custody and asset management.

- Argentina now recognizes Bitcoin as legal tender for international trade.

- Peru launched a blockchain pilot for government bonds in 2025.

Colombia stands out because it’s the only country in the region where the banking system is outright blocked, yet crypto adoption keeps growing. According to Chainalysis, Colombia ranked in the top 10 globally for peer-to-peer crypto volume in 2024, even with these restrictions.

Compliance Costs and Fines

Payment service providers (PSPs) that handle crypto transactions face heavy compliance burdens. They must build systems to capture sender/recipient data, monitor for suspicious activity, and report everything to UIAF. Many have turned to RegTech tools-automated software that scans transactions and flags risks.

But it’s expensive. In 2024, the Colombian government fined three PSPs over $1.5 million total for failing to report crypto transactions properly. One company had to shut down its entire crypto payment service because it couldn’t afford the upgrades.

Smaller fintechs are struggling. Many can’t compete with larger players like Wenia or Bitso, who have more capital to invest in compliance. The result? Less competition, higher fees, and fewer options for users.

What’s Next for Colombia?

The SFC’s original regulatory sandbox for stablecoins expired in December 2023. No new sandbox has been announced. That’s left new crypto startups in limbo. Without a clear path to approval, innovation is stifled.

But pressure is building. Finance Minister Ricardo Bonilla said in June 2023: “Cryptocurrencies are a reality.” He added that regulation is needed-but only if it protects the Central Bank’s monopoly on currency issuance. That’s the key: the government doesn’t want crypto to compete with the peso.

Experts believe Colombia won’t lift the banking ban anytime soon. But they do expect new laws. The most likely path? A comprehensive crypto law that allows regulated exchanges and custodians to operate under strict oversight-but keeps banks out of direct involvement.

One possibility: the government could create a “crypto gateway” system, where licensed fintechs act as intermediaries between banks and crypto platforms. That way, banks stay clean, but users get a smoother experience.

How to Navigate the System Today

If you’re in Colombia and want to use crypto, here’s what works:

• Use peer-to-peer platforms like LocalBitcoins, Paxful, or Wenia’s P2P marketplace to buy/sell crypto with cash or bank transfers (if the counterparty accepts it).
• Keep crypto in a non-custodial wallet (like Trust Wallet or Ledger). Never store it on an exchange unless you’re actively trading.
• Track all transactions for tax purposes. Crypto is treated as an intangible asset-capital gains are taxable under personal or corporate income rules.
• Use RegTech-compliant PSPs if you’re a business. They’re more likely to avoid fines and keep your account open.
• Stay updated. The SFC and UIAF frequently update guidelines. Subscribe to their official bulletins.

Frequently Asked Questions