Colombia Eyes CBDC to Ease Transactions, Stop Tax Evasion
Aiming to make transactions easier for consumers and to put an end to tax evasion, Colombia is reportedly considering introducing a central bank digital currency (CBDC).
The information was shared by Luis Carlos Reyes, head of the Colombian Tax and Customs Office, according to a report by CoinDesk that cited an interview published in Spanish in the local publication Semana.
“One of the important objectives is that when payments are made for a certain amount, they will be recorded in an electronic medium,” Reyes said, per the report.
Cash is still a big component of the economy in Colombia and Latin America, which represents a market opportunity worth several hundred billion dollars for FinTechs and online platforms, PayU Global Payments CEO Mario Shiliashki told PYMNTS’ Karen Webster in an April interview.
Read more: Five Million Colombian SMBs Are Ready to ‘Go Digital’ Amid Exploding Demand for BNPL
“Colombia and Latin America still have a way to go in terms of digital adoption — and in digital payments adoption in particular,” Shiliashki said.
Other countries in the region are considering introducing CBDCs as well.
Mexico is shooting for a 2025 launch of a digital peso, Bank of Mexico Governor Victoria Rodriguez Ceja said, according to Ledger Insights. While its primary goal will be increasing financial inclusion, faster payments and interoperability are also key.
Mexico’s target date is a year behind the 2024 goal the central bank announced in January.
Similarly, the Central Bank of Brazil pushed plans to begin testing a digital real from later this year to 2023, potentially launching a live CBDC as early as the second half of 2024, according to The Brazilian Report.
The digital real project is aimed primarily at financial innovation rather than real-time payments, Fabio Araujo, an economist at the central bank, said in a May 31 paper for the Bank for International Settlement (BIS).