Amid Colombia’s economic growth that exceeded expectations in the second quarter, An official from the country’s tax and customs agency has hinted at some national digital currency plans.
The head of the Directorate of National Taxes and Customs of Colombia, Luis Carlos Reyes, affirmed that the government of the new Colombian president, Gustav Petro, will seek to create a digital currency to prevent illicit financial activities such as tax evasion.
Colombia’s digital currency plans are part of the country’s new monetary policy measures that aim to increase the transparency of financial transactions, the official said in an interview with local magazine Week. According to the report, it is estimated that tax evasion in Colombia so far represents 6 or 8% of the country’s gross domestic product.
Reyes also pointed out that a potential digital currency would be of great benefit to the user experience, stating: “The creation of a digital currency would make these transactions easier for the consumer.”
The official did not specify exactly what type of digital currency the Colombian government will seek to launch, a central bank digital currency (CBDC) or rather an asset-backed national currency similar to the Venezuela’s Petro digital currency project.
Hernando Vargas, technical deputy governor of the Colombian central bank, had already analyzed the implications of a retail CBDC in Colombia in early 2022. The official noted that cash is the preferred low-cost payment instrument in Colombia, noting the potential threats of cryptocurrencies and stablecoins in certain circumstances. He stated:
“A line of defense against widespread use of cryptocurrencies and stablecoins is weaker in Colombia than in other jurisdictions, and the discussion of retail CBDC adoption becomes particularly interesting.”
The news comes shortly after new Colombian President Petro was sworn in on August 7. As we told you before, Petro is known for expressing his support for cryptocurrencies like Bitcoin (BTC). As early as 2017, Petro suggested that BTC could remove the power of the government and return it to the people. “Virtual currency is pure information and therefore energy,” Petro said at the time.
According to recent news, the Colombian economy exceeded expectations in the second quarter, which is a boost for the Petro government, as the GDP would have increased by 12.6% compared to the expected growth of 12.1%.
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