The Colombian representative chamber has recently approved a budget law that includes a questionable article that gives the state the power to seize bank customers’ idle funds for budgetary purposes. The funds could be regained under certain circumstances stated by the law if the account owners can’t prove their ownership.
The recent budget law that was passed last week through an express vote by Colombian legislators, came with a controversial change, giving the government permission to take bank clients’ funds that have been idle in bank accounts for more than a year.
Article 81 of the said budget legislation consists of details to be followed. “The balance of the checking or savings accounts that have been inactive for more than one year and do not exceed the value equivalent to 322 UVR ($24.40), will be transferred by the holding financial entities… to finance in the appropriation of the General Budget of the Nation.”
It emphasizes the obedience of financial entities that will have to modify their system to comply with the new law. Although, if the account owner realizes the funds are no longer in the account, the relevant authorities will have to repay the funds with the interest realised, just like funds in depository financial institutions.
Several representatives and analysts believe the budget law was passed in a hurry without proper analysis needed.
While the proposed article might not affect everyone and its effect is low, it calls for a rethink on the power wielded by the state and central banks over fiat money.
This might ignite the use of cryptocurrency as a wonderful option for traditional financial instruments. Colombia is one of the countries in South America that uses a lot of cash and this has given cryptocurrency companies the job to satisfy this need.
Little wonder why there are over 50 cryptocurrency ATMs in the country where the government does not fully support cryptocurrency. Will these moves by the government result in a surge in the adoption of cryptocurrency shortly? That remains to be seen.
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