Colombia aims to implement national digital currency to prevent tax evasion

According to Cointelegraph, Luis Carlos Reyes, head of Colombian Tax and Customs National Authority, said that the government of the recently unveiled Colombian president Gustavo Petro intends to create a digital currency

Colombia aims to implement national digital currency to prevent tax evasion
Cointelegraph noted that Petro is known for showing his support for cryptocurrencies such as Bitcoin

With Combia’s economic growth exceeding expectations in the second quarter, an official of the country’s taxation and customs agency has suggested plans for implementation of a national digital currency, as reported by Cointelegraph.

According to Cointelegraph, Luis Carlos Reyes, head of Colombian Tax and Customs National Authority, said that the government of the recently unveiled Colombian president Gustavo Petro intends to create a digital currency to prevent illicit financial activity such as tax evasion. Colombia’s plans to implement digital currency is aimed at the country’s new monetary policy measures to expand transparency of financial transactions, the official stated in an interview with magazine Semana. On the basis of the report, tax evasion in Columbia is expected to account for six to eight percent of the country’s gross domestic product, as of yet. Reyes mentioned that how digital currency’s ability can benefit user experience.

From data provided by Cointelegraph, the official did not comment on what sort of digital currency the Colombian government will be looking to launch, whether a central bank digital currency (CBDC) or an asset-backed national currency similar to Venezuela’s Petro Digital Currency project. Hernando Vargas, technical deputy governor, Colombia’s central bank, previously thought of implications regarding a retail CBDC in Colombia, in early 2022. The official noted that cash is preferred for low-cost payments in Colombia, with regard to potential threats from cryptocurrencies and stablecoins in certain situations. 

Moreover, Cointelegraph noted that Petro is known for showing his support for cryptocurrencies such as Bitcoin (BTC). In 2017, Petro indicated that BTC has the ability to remove power from government and can distribute it among the people. According to the recent reports, Colombia’s economy went over expectations the second quarter to provide support for Petro’s government, with gross domestic product (GDP) reportedly reaching 12.6% growth against the expected 12.1% growth.

(With insights from Cointelegraph)

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