Disclaimer: This page is not financial advice or an endorsement of digital assets, providers or services. Digital assets are volatile and risky, and past performance is no guarantee of future results. Potential regulations or policies can affect their availability and services provided. Talk with a financial professional before making a decision. Finder or the author may own cryptocurrency discussed on this page.
Stablecoins are cryptocurrencies designed to maintain a stable value. They’re usually tied to fiat currencies like the US Dollar. Unlike bitcoin or other volatile assets, stablecoins like USDT or USDC stay pretty consistent in value, making them popular for trading, sending money abroad and everyday transactions.
While stablecoins are less volatile, they still come with some risks, such as potential regulatory issues. So before you buy stablecoins, make sure you understand these unique risks as well as its legal, regulatory and tax status here in Colombia.
How to buy stablecoins in 4 steps
To buy stablecoins, all you’ll need is a smartphone or computer, an internet connection, photo identification and a way to pay.
- Compare crypto exchanges. The easiest way to buy stablecoins is from a cryptocurrency exchange. Comparing in the table helps you find a platform with the features you want, like low fees, ease of use or 24-hour customer support.
- Create an account. To create an account on an exchange, you will need to verify your email address and identity. Have some photo ID and your phone ready.
- Make a deposit. Once verified, you can deposit COP using the payment method that best suits you — cryptocurrency, bank and card payments are widely accepted.
- Buy stablecoins. You can now exchange your funds for stablecoins. On beginner-friendly exchanges, this is as simple as entering the COP or stablecoin amount you want to purchase and selecting “buy.” If you like, you can then withdraw your stablecoin to a personal wallet.
Disclaimer: This page is not financial advice or an endorsement of digital assets, providers or services. Digital assets are volatile and risky, and past performance is no guarantee of future results. Potential regulations or policies can affect their availability and services provided. Talk with a financial professional before making a decision. Finder or the author may own cryptocurrency discussed on this page.
Where to buy stablecoins in Colombia
If this is your first time buying cryptocurrency look for a platform that accepts Colombian pesos, like Binance.
Don’t worry too much about extra features or coins for now — you can always sign up with another exchange later.
Use the table to choose a platform that meets your needs and select the Go to site button to get started.
What are stablecoins?
Stablecoins are a type of cryptocurrency designed to provide a stable value, typically pegged to fiat currencies like the US Dollar or commodities such as gold. Unlike volatile cryptocurrencies like bitcoin, stablecoins aim to maintain consistency to offer a more reliable alternative for transactions and storage of value.
Like other cryptocurrencies, stablecoins operate on blockchain networks, which allow peer-to-peer transfers outside of centralized banks. These transactions are recorded on a public ledger to help ensure transparency and security. Popular stablecoins, such as USDT, USDC and DAI, keep their prices steady through algorithms or actual financial reserves, like cash or bonds.
Unlike Bitcoin’s capped supply of 21 million, stablecoins are issued as needed to maintain their value. They can be purchased and used in fractions, making them even more accessible and practical.
What will I need to buy stablecoins?
To create an account with your chosen crypto platform, you only need an email address or mobile number. This will usually allow you to deposit cryptocurrency, but not COP.
If you want to buy stablecoins with Colombian pesos, you’ll need to pass a Know Your Customer (KYC) check.
This procedure is standard security for most exchanges in Colombia and requires you to upload a photo ID and, in some cases, a selfie with today’s date.
KYC is usually approved instantly, but in rare cases, you may have to wait a few hours or days.
What are the best ways to buy stablecoins?
Once you’ve set up your account, you’ll need to deposit funds to buy stablecoins. We’ve listed some popular ways to buy stablecoins and what you should know about each payment method.
How to find the best place to buy stablecoins in Colombia
There are dozens of different trading platforms to choose from when buying stablecoins in Colombia, so to help you find your best option, keep these factors in mind:
- Security. Look at the security features the platform has to offer, like 2-factor authentication and PGP-encrypted emails. Cold storage of user funds is considered industry standard, but insurance funds are less common and indicate good security practices.
- Fees. Check the fine print to find out exactly how much your transaction will cost. Depending on the platform you choose, these could include spreads, trading fees and deposit and withdrawal charges.
- Transaction limits. Are there any minimum or maximum limits on the amount of stablecoin you can purchase? Does the exchange restrict the amount of funds you can withdraw from your account in any 1 transaction or 24-hour period?
- Other platform features. Look out for other features that suit your investment or trading needs. For instance, many exchanges now let you earn yield on your holdings, while some issue crypto debit cards to help you spend your coins.
- Customer support. If you ever have a problem with a transaction, will you be able to quickly and easily get in touch with the customer support team? Are they based in Colombia? Check what contact methods are available and find out how quick the team is at responding to inquiries.
- Insurance fund. A small number of exchanges now insure user funds. Beware that policies vary greatly between exchanges, so you’ll need to research this thoroughly if insurance is important to you.
- Reputation. As a young industry, reputation can provide a lot of clues when choosing an exchange. For instance, who are the founders? Have there been any controversies? Are their business practices transparent? If you can’t find any of this information, that may be a red flag.
- Range of coins. If you’re thinking about adding other cryptos to your portfolio in the future, check to see what other coins you can buy through the platform.
- Read reviews. Finder’s crypto exchange reviews include user feedback, which helps you get a better idea of what the exchange is like to use for other people starting just like you.
Are stablecoins safe to invest in?
You shouldn’t invest in any asset, including stablecoins, without doing plenty of research first. Before you buy stablecoins, make sure you understand and weigh up these risks:
- Backing and reserves. Stablecoins are typically pegged to fiat currencies like the US Dollar, but their safety depends on the issuer’s ability to back them with adequate reserves. Always research whether the stablecoin is audited and if the reserves are transparent.
- Regulatory uncertainty. The regulatory environment for stablecoins and other cryptos is constantly changing. It’s important to understand how international rulings have the potential to impact crypto’s future — for better or worse.
- Perceived stability. While stablecoins aim to maintain a fixed value, there have been instances (e.g., algorithmic stablecoins) where the peg failed due to market pressure or poor design. Ensure the stablecoin you choose has a strong track record and reliable backing.
- Exchange vulnerabilities. Leaving your stablecoins on a crypto platform exposes you to several counterparty risks, including:
- Scams. Scammers frequently try to trick exchange users into handing over their username and password, often by phishing with malicious emails or fake website links. Use 2FA and encrypted emails to help protect your funds.
- Hacks and theft. Exchanges are vulnerable to hacks and theft, so choose one with good security practices and a track record of safety.
- Fiscal mismanagement. In mid-2022 a number of crypto platforms froze user funds after it was revealed they had engaged in irresponsible funds management.
- Insurance. Unlike stocks, only a small handful of exchanges provide insurance on your cash deposits.
- Novel technology. Stablecoins rely on blockchain technology, which is still relatively new and evolving. Stablecoins don’t yet have the same track record or performance history as some other asset classes.
- Technical learning curve. Evaluating the tech behind stablecoins before you invest is important, but requires a deep understanding of the blockchain and other aspects of decentralized finance. Be prepared to do plenty of research.
- Wallet vulnerabilities. The crypto network itself is near-impossible to hack, but the software used to manage your funds — known as wallets — is still vulnerable. Thoroughly research a number of crypto wallets before deciding which to use.
- Transactions can’t be reversed. Once you’ve submitted a transaction to the stablecoin network, it can’t be canceled or reversed. Double-check the receiving address before sending a stablecoin payment or moving stablecoins off an exchange. There is no way to refund stablecoins sent to the wrong address.
- Energy consumption. Stablecoins is reliant on proof-of-work mining, which consumes huge amounts of energy. This could place it in the cross-hairs of governments as the world moves to a greener economy.
Stablecoins are often considered safer than volatile assets like Bitcoin, but they are not entirely without risk. Understanding the mechanics and the issuer’s credibility is key to making informed decisions.
How are stablecoins taxed?
Stablecoins are increasingly treated as a financial asset by governments around the world. You might need to report stablecoin holdings or transactions on your taxes, especially if you’ve earned interest from lending stablecoins or used them for trading. Consult a tax professional to make sure you don’t run afoul of the law.
After you’ve bought stablecoins
Once you own some stablecoins, you have two options — keep it on an exchange or move it to a personal wallet. Each comes with its own set of pros and cons.
- Convenience. Keeping your stablecoins on an exchange is convenient because you can buy and sell at any time.
- Security. Holding stablecoins on an exchange does come with significant counterparty risks, but reputable platforms also invest heavily in security, so you don’t have to worry about the pitfalls of self-custody.
- Insurance. A small handful of exchanges now operate insurance schemes. These can range from ensuring user deposits are held in cold storage to reimbursing customers if a hack occurs.
- Earn yield. Many exchanges now let you earn yield on your stablecoins. Exchanges do this by lending your stablecoins so it carries its own risks. Do your research before deciding if it’s the right option for you.
- Phishing. Exchange users are frequently targeted by scammers trying to steal login information through malicious emails and fake website links.
- Hacking. Exchanges are major targets for hackers. While security practices have improved substantially, hacks still occur from time to time.
- Account freezing. Exchanges have been known to occasionally freeze user accounts, whether due to security concerns, technical issues or market turbulence. This could see you temporarily lose access to your crypto.
Moving your stablecoins to a non-custodial wallet
- Self-custody. A mantra repeated by crypto investors is “Not your keys, not your coins.” This comes from the idea that the only way to guarantee ownership of your stablecoins is to own the private key — which isn’t the case when you hold on an exchange.
- Security. Cryptocurrency wallets vary greatly in their features and security. For the most secure experience, consider purchasing a hardware wallet, which is usually a small USB device that keeps your private keys offline at all times for an extra layer of security.
- Utility. If you plan to use your stablecoins for transactions, daily spending or decentralized finance (DeFi), then storing it in a wallet rather than an exchange will be more convenient.
- Learning curve. It’s no secret that learning how to use a crypto wallet takes some time and effort. Spend some time learning how crypto wallets work before transferring any of your funds.
- Personal responsibility. Owning your own money can be liberating, but it also means the responsibility is all yours. If you lose your private key, the only way to regain access to your wallet is through the seed phrase. Make sure to store both of these privately and securely.
- Inheritance. A challenge presented by crypto wallets is how to pass access on in the event of death or disability. Several companies are experimenting with ways to solve this problem, like the Trezor Model T wallet’s Shamir backup feature.
Bottom line
If you want to buy stablecoins, start by comparing a range of crypto brokers and exchanges available in Colombia. Look at their features, fees, security and overall reputation to decide which platform is right for you.
Remember that owning and using stablecoin is not without its risks. Carefully consider investing in stablecoins as part of a wider strategy, and talk to a financial advisor if you have any questions.
Once you’ve bought some stablecoins, think about your short and long-term goals. This will help you decide whether to keep it on an exchange or move it to your own wallet.
FAQs
How do beginners buy stablecoin?
Beginners will probably find it easiest to buy stablecoins from a crypto exchange that offers instant purchases with COP. Once you’re comfortable, buying stablecoins on the spot market is usually a less expensive option, and many platforms have now made their trading interfaces beginner-friendly.
How much stablecoin should a beginner buy?
While stablecoins are considered safer than stablecoins and other cryptocurrencies, they are still widely considered a high-risk asset, so you should only invest what you can afford to lose.
To help cushion the highs and lows of market volatility, consider dollar-cost averaging (DCA). This involves buying small amounts of stablecoin at regular intervals, such as every week or month. DCA removes some of the emotion from investing and can help support a long-term strategy.
What is the safest way to buy stablecoins?
The safest way to buy stablecoins is through a reputable cryptocurrency exchange or broker that complies with Colombian laws and regulations. Look for one that promotes stringent security measures such as KYC for all users, 2-factor authentication and an insurance fund.
Once you’ve purchased some stablecoin, consider moving it into a self-custodial wallet for added security.
What is the best way to buy stablecoin?
The best way to buy stablecoin is to identify your investment goals first. Do you plan to trade frequently or will you make a few purchases and hold long-term? For regular trading, fees are lowest on a spot market, while casual investors might feel the convenience of a higher-fee instant purchase is worthwhile.
Compare exchanges and trading platforms in our table to decide which is the best place to buy stablecoin for you.
Can I buy stablecoin without ID?
There are still a small number of ways to buy stablecoin without an ID. However, it tends to be safer to purchase stablecoins through a platform that requires identification as part of the Know Your Customer (KYC) verification process.
Disclaimer: Cryptocurrencies, including bitcoin, are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance of BTC is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators’ websites before making any decision. Finder, or the author, may have holdings in bitcoin or any other cryptocurrency discussed.
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