Colombia may introduce a central bank digital currency, the country’s tax agency chief said yesterday.
Luis Carlos Reyes, Director of DIAN, Colombia’s Tax and Customs Agency, Told semna The magazine said on Monday that the South American nation’s new government would consider creating “a digital currency” that would “make transactions easier for the consumer.”
A central bank digital currency (CBDC) is a digital version of a state’s fiat currency, like the US dollar or euro, backed by a central bank.
This is the first time the Colombian government has talked about introducing one. Colombia’s new President Gustavo Petro took office on 7 August.
An ex-guerrilla and the country’s first left-wing president, Petro campaigned on a ticket to tackle corruption, improve opportunities for the country’s depressed youth, move the country away from fossil fuels, and negotiate with paramilitary groups.
They have also shown interest in digital assets: 62-year-old Petro last year Told Propagating that the country should be mining bitcoins using renewable energy instead of producing cocaine.
But CBDC is very different from bitcoin. Unlike cryptocurrencies like bitcoin, CBDCs are centralized. This means that a central power—the government—controls them. Privacy advocates have warning So that they allow the state to monitor citizens’ spending, as well as more easily enforce capital controls.
Countries around the world are currently in various stages of research and release on CBDCs. Aside from smaller Caribbean countries, like the Bahamas, most major economies have yet to issue one.
China, however, is already created Its Digital Yuan Live.
Colombia is becoming increasingly crypto-friendly: Latin America’s fourth-largest economy last month free Draft rules for crypto companies who want to operate in the country.
and its major banks have partnership With crypto exchanges—including Binance—in an experimental project that allows customers to buy small amounts of digital assets such as bitcoin and ethereum through their largely traditional channels.