Colombia’s Largest Bank Launches Peso Stablecoin and Cryptocurrency Exchange
A Colombian bank working in the cryptocurrency exchange has claimed that the platform was created after a decade of study and research.
The largest bank of Colombia called The Bancolombia has embarked on a new journey with the launch of a new exchange platform called Wenia. The platform aims at onboarding 60 thousand investors during its first 12 months of business.
Peso-based Stablecoin
The platform is looking to compete against local giants such as Binance and Bitso. At the same time, the Colombian bank has also launched a new stablecoin pegged to the local fiat namely pesos.
The stablecoin is called COPW and it intends to act as onboarding solution for exchange consumers. In addition to COPW, Wenia will allow investors to invest in Bitcoin, Ethereum, USDC, and Polygon.
At the same time, investors who can create an account on the trading platform need to have a Colombian nationality. The banking giant is also making plans to strengthen the use of cryptocurrencies in the region by catering to amateur and experienced crypto traders via its platform.
The country accounts for the third largest Latin American nation in terms of cryptocurrency trading volumes as per Chainalysis statistics.
Entry of Colombia’s Largest Bank in the Digital Asset Sector
Speaking with Forbes, the President of Bancolombia Juan Carlos Mora noted that he has been working for a decade to launch the cryptocurrency trading platform.
He further stated that the bank intends to provide all the necessary opportunities and facilities required for the development, adoption, and usage of digital assets and blockchain technology within the sector.
The official announcement issued by Bancolombia has asked the investors about the associated risks of working with digital assets. The bank has stated that the listed digital assets on its cryptocurrency trading platform are not securities and they are not backed by any government. The bank has also declared that the investors are not protected under deposit insurance coverage.
At the same time, the bank has also communicated trading risks with investors such as price volatility and loss of value associated with cryptocurrencies. The financial institution has reportedly informed investors that no branches or firms related to Bancolombia Group will be exposed to cryptocurrencies. A legal expert on LinkedIn noted that Wenia will operate as an independent firm operating as a Las Bermuda registered firm.
Investors to Prefer Decentralized Exchanges Over Centralized Exchanges
Latin American cryptocurrency investors have indicated a proclivity towards centralized trading platforms. The assertion was concluded from a Chainalysis report that compared the preference of the investors hailing from the region, unlike the rest of the world.
The report also suggested that investors tend to go for centralized trading platforms rather than decentralized exchanges.
The report published on 11th October claims that Latin America has become the 7th largest in terms of a crypto economy. The region is closely following Middle Eastern and Northern American, East Asian, and Eastern European markets in the same regard.
However, the report highlighted the penchant of Latin investors in regulated trading platforms in comparison to all the aforementioned demographic regions.
However, in different nations of the same region, the distribution of trading activities on local trading platforms differs largely in comparison to the global mean.
The world average preference for centralized trading platforms stands at 48.1%, 44% for decentralized platforms, and for other 5.9% DeFi entities. In regions such as Venezuela centralized exchanges popularity stands as high as 92.5% and for DEXs the number is 5.6%.
Chainalysis analysts noted that the high amount of crypto trading activities in Venezuela is attributed to the complex humanitarian emergency. The report further indicates that during Covid-1 pandemic in 2020 cryptocurrency played a major role in helping the healthcare professionals.
While the government of Venezuela refused foreign aid, the locals became increasingly dependent on cryptocurrencies instead of local fiat payments.
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