The director of Colombia’s tax and customs agency, Luis Carlos Reyes recently revealed that Colombia may introduce a central bank digital currency (CBDC). The South American nation’s new government says it is looking to create a digital currency that would make transactions easier for consumers.
Reyes explained that the currency would help the country to have more control over transactions and payments. This would ostensibly allow the country to curb tax evasion, which is estimated to represent up to 8% of the GDP of the country.
In the same way, the regulators will be studying to establish limits on the amount of money that can be paid using cash to incentivize the use of digital, trackable alternatives.
It is the first time Colombia’s government has talked about introducing one since Colombia’s new president, Gustavo Petro, took office on August 7.
An ex-guerilla and the country’s first-ever left-wing president, Petro has always shown an interest in digital assets. Additionally, Petro pointed out last year while campaigning that the country should mine Bitcoin using renewable energy instead of producing cocaine.
Furthermore, Leonardo Villar, manager of the Central Bank of Colombia, said that the central bank was studying the issuance of a digital currency during a banking convention at Cartagena. Villar explained that the functions and the convenience of such currency were being reviewed by the Bank.
According to Villar, one of the biggest objectives of the digital currency is to make the different digital wallets that are available in the nation interoperable. The current design is said to be very inefficient and does not allow for users of the wallets to pay for state-related expenses like taxes.
Colombia is becoming increasingly crypto-friendly. Also known as Latin America’s fourth largest economy, last month the country released draft rules for crypto companies that want to operate in the country.
The country’s major banks have recently partnered with crypto exchanges such as Binance, in an experimental project which allows customers to buy small amounts of digital assets like Bitcoin and Ethereum through their largely traditional channels.