Colombia Confirms Plans For Digital Currency

08/18/2022

2 minutes read

2022.08.18 19:38

Colombia’s central bank governor Leonardo Villar has hinted towards the development of a new national digital currency. Colombia’s central bank is looking to “advance toward the development of a system of digital transfers,” said Villar.

Media reports also suggest that Luis Carlos Reyes, the director of Colombia’s tax and customs agency, said that Colombia’s new government formed by president Gustavo Petro is looking to create “a digital currency” that would make “transactions easier for the consumer.”

Talking about how digital currency’s ability can benefit user experience, Reyes said that Colombia’s plans to implement digital currency are aimed at the country’s new monetary policy measures to expand the transparency of financial transactions. According to Reyes, tax evasion in Columbia is expected to account for six to eight percent of the country’s gross domestic product, as of yet.

Colombia’s tax and customs agency said that a system established with the blockchain-based innovation for open journals would certainly improve the nation’s system for monitoring as well as mapping purchases made by its residents.

The Colombian government did not reveal what kind of digital currency the country is contemplating, whether it’ll be a central bank digital currency (CBDC) or an asset-backed national currency similar to Venezuela’s Petro Digital Currency project.

Reyes claimed that all “elements” that are taken into consideration as possessions in the regulation need to be stated, be it bonds, supplies, or crypto.

New Government’s Support For Digital Currency

After Petro was elected, he expressed support for crypto and indicated that adopting crypto could help countries in the Latin region deal with high national currencies’ high inflation. In support of crypto, Petro stated that Bitcoin removes issuing power from the states and the banks.

“It is a community currency that is based on the trust of those who carry out transactions with it. Since it is based on a blockchain, trust is measured and grows, hence its strength,” Petro said.

On the Flipside

The central bank said that it will have absolute control and that has the market worried about the privacy of data.

Why You Should Care

Under Petro’s leadership, Colombia’s economy went over expectations in the second quarter with GDP reaching 12.6% growth against the expected 12.1% growth.