Amid Colombia’s financial development beat expectations in the second quarter, an official at the country’s tax and customs agency has implied some national digital currency plans. A national digital currency would help control tax evasion in Colombia, which is estimated at up to 8% of GDP, the head of Colombia’s tax and customs agency supposed.
Luis Carlos Reyes, the head of the Colombian Tax and Customs National Authority, demanded that the government of newly inaugurated Colombian President Gustavo Petro will seek to create a digital currency to prevent illegal financial activity like tax evasion.
Colombia’s digital currency plans are part of the country’s new monetary policy trials aiming to increase the transparency of financial transactions, the official stated in an interview with the local magazine Semana. According to the report, tax evasion in Colombia is projected to account for 6% or 8% of the country’s gross domestic product so far.
Reyes also pointed out that a potential digital currency would be a major benefit for user experience, stating: “The creation of a digital currency would make these transactions easier for the consumer.”
Though the official did not specify what kind of digital currency exactly the Colombian government will be looking to launch, a central bank digital currency (CBDC) or rather an asset-backed national currency.
Hernando Vargas, technical deputy governor at the central bank of Colombia, formerly considered the implications of a retail CBDC in Colombia earlier in 2022. The official also noted that cash is the favored instrument of low-cost payments in Colombia, pointing to potential threats from cryptocurrencies and stablecoins in certain circumstances.
The news comes shortly after new Colombian president Petro was sworn into office on Aug. 7. Back in 2017, Petro recommended that BTC could remove power from the government and return it to the people. “Virtual currency is pure information and therefore energy,” Petro said at the time.
According to the latest reports, Colombia’s economy beat expectations in the second quarter in an increase for Petro’s government, with GDP reportedly rising 12.6% versus the expected 12.1% growth.
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