Cryptocurrency is gaining momentum these days. The proof: many countries are considering integrating digital currency into their economy. Colombia, in particular, seems to have taken the plunge if we refer to this new project of the new Colombian government. Luis Carlos Reyes, the director of DIAN (Colombian tax authority), has effectively announced that Colombia will introduce the cryptocurrency of its central bank.
Colombia will launch its digital currency
In office since August 7, the new Colombian President Gustavo Petro has never hidden his interest in digital assets. This article from Decrypt.com mentions that during his presidential election campaign last year, Petro once said that Colombia should mine bitcoin. So here he is setting up the launch of a crypto project in his country, even if it is not really comparable to bitcoin.
It is indeed a central bank digital currency (CBDC). So it will be a digital version of fiat currency. It will remain backed by a central bank, will therefore be centralized and under the control of the government.
For the time being, the Colombian government has not yet revealed more information on this project. He has not yet explained how this digital currency works compared to the traditional payment system. Even the name of the cryptocurrency was not disclosed.
A crypto project to fight tax evasion
The main objective of the launch of this cryptocurrency is to fight against tax evasion in Colombia. According to Reyes, the launch of a digital currency would help the state improve the traceability of citizens’ transactions. The fact that the use of cash currencies allows traders to evade taxes. At least, all transactions via digital currency will be traceable by the state and will be taxed.
The accompanying measures for the launch of this digital currency are being studied. But the head of the tax administration has already spoken of a restriction on cash payments above a certain amount. After the launch of the digital currency, any payment above 10 million pesos (about $2,400) will no longer be possible in cash. It will be done with the new cryptocurrency.
Tax evasion remains a major problem in Colombia. To remedy this, the new government is considering using cryptocurrency. This requires monetary policy reform. But the government seems to be ready to get started. A project to watch closely…
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