The budget law for next year, approved recently by the Colombian representative’s Chamber, contains a controversial article that permits the state to seize funds from bank customers to be used for budgetary reasons. These funds can be recovered if account holders prove ownership.

Colombian Government Wants Unused Funds

The new budget law that was approved last week via an express vote by Colombian legislators, has 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 mentioned budge law details the procedure followed to do this. It says

The balances of the checking or savings accounts that have been inactive for a period of more than one year and do not exceed the value equivalent to 322 UVR ($24. 40), will be transferred by the holding financial entities… in order to finance appropriations of the General Budget of the Nation,

It places the burden of compliance on financial institutions, which will need to adapt their systems in order to comply with the new regulation.

If the account holder discovers that a request was made for these funds they will be required to reimburse them with interest accrued. Analysts and representatives believe that the budget law was passed in a rush and not properly analyzed.

Cryptocurrency as an Alternative

While the article is not intended to affect all account holders, and it may have a limited impact on them, it opens up a discussion about the influence that central banks and the state have over fiat money use in the country. This could lead to the adoption of cryptocurrencies and other alternative finance instruments, such as savings and investing.

Colombia has the highest cash usage in Latin America. Cryptocurrency companies are tasked with trying to meet this demand. This is why there are already 50 cryptocurrency ATMs in the country to target these use cases, an unusually large number for a country that has not been known for its cryptocurrency appeal.

It remains to be seen whether these actions by the government and advances made by cryptocurrency companies in the nation can encourage a wave adoption.

What do you think about the Colombian budget law granting access to the government for seizing users’ funds? Comment below.

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