In an unregulated crypto environment task of managing a crypto exchange is one of the hardest ones. One of the prerequisites for successful crypto exchange is a good cooperation with a traditional bank. This is a must-have for the exchanges as they need to have some sort of official bank accounts in order to regulate their money flow. In Europe, there are certain regulations and banks are starting to build business relationships with crypto exchanges which are a great sign. European crypto exchanges at least know what to expect, there are no unpleasant surprises dealing with the European banks. Unfortunately, this is not the case in other parts of the world.
Buda to challenge Colombian banks
Buda, one of the biggest crypto exchanges in South America recently encountered problems after three major banks closed their accounts without giving an official notice, as CoinIdol reports. Buda’s director Alejandro Beltran noted that crypto exchange is doing everything in their power to get back their closed account and resume working.
Buda is a crypto-to-crypto exchange with 35,000 accounts in Colombia and over 45,000 in Chile, Peru, and Argentina. Being that large, Buda represents one of the pillars of the crypto community in South America. Buda's director Beltran also stated that there are issues in Colombia's crypto business as the country gives pretty mixed information regarding blockchain technology. On the one hand, the government of Colombia publicly encourages and supports innovations. On the other hand, crypto businesses have issues like these troublesome blockings. Also, financial institutions in Colombia have constantly expressed their fear towards possible crypto related crimes. In an environment like this, it is extremely hard to reach some level of stability regarding crypto business as possible problems may arise from many different sources.
This is not the first time that Buda experience issues with the banks. In April this year, Buda sued 10 banks in Chile after they closed Buda's accounts. One of the biggest things that give negative reputation to the business is uncertainty. In this case, uncertainty is not because of bad business decisions by Buda, uncertainty is simply coming from the fact that in unregulated market banks have the power to do whatever they want without government penalties.
South America is huge and important crypto market. It would be a shame for such a market to not reach its full potential because of some sloppy coordination on the government-crypto part. Unfortunately at this moment, crypto market needs traditional banks, but also it seems as though traditional banks need a crypto market. Proof for that we can find in Europe. European Union has managed to support the blockchain and crypto space, the result of that is in pretty stable cooperation between banks and crypto exchanges. Also, European banks seem to notice possible financial innovations that blockchain might bring. It is important to note that all of this is possible because of certain government supervision. Maybe that is the way to go, at least at this particular moment. Let us hope that South America’s government will protect their crypto related business with some crypto friendly regulations.
What do you think about the crypto-unregulated countries? Are regulations really necessary? Share your opinion in the comments!