Director of Colombia’s National Directorate of Taxes and Customs, Luis Carlos Reyes (also known as Dirección de Impuestos y Aduanas Nacionales de Colombia or DIAN), has disclosed that the South American nation may launch its own digital currency backed by the central bank (CBDC).
Reyes spoke on Gustavo Petro, the incoming president of Colombia, and his objectives for monetary policy, including implementing the CBDC to facilitate consumer transactions and combat tax evasion, in an interview with regional news source Semana magazine.
“This is crucial to enhancing the economy’s ability to track payments made… “People who must pay VAT or income tax on those transactions might evade them when cash transactions are not documented anywhere since it is simpler to create sales that are not recorded,” he said.
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According to Semana, no official in the President Petro-led administration, which entered office this month, has previously spoken out in favour of the CBDC. Petro promised that if elected, Colombia would mine bitcoin using renewable energy. He made this promise during his campaigns last year.
Colombia will join other Latin American nations, such as Brazil, Mexico, and Venezuela, already researching CBDCs. These nations want to begin operating their CBDCs within the following few years, according to the Bank for International Settlements (BIS).
Colombia’s adoption of digital assets
Despite the absence of a defined legal framework for the market, the tax office has been harshly prosecuting those who attempt to cheat taxes on digital assets. Investors in digital assets who failed to report their income and complementary taxes on time or filed them incorrectly have been the target of enforcement actions by the DIAN since the beginning of the year.
Colombia is a pioneer in adopting digital assets in the region and internationally. The Financial Superintendence of Colombia (also known as Superintendencia Financiera de Colombia or SFC), the nation’s financial watchdog, has proposed new rules to regulate the interaction between banks and service providers of virtual assets in response to the asset class’ increasing popularity.
In accordance with the proposal, banks may only offer banking services to Virtual Asset Service Providers (VASPs) who have registered with the Online Reporting System, and implemented KYC/AML/CFT (Know Your Customer/Anti-Money Laundering/Combating the Financing of Terrorism) measures, and possess the necessary operational and technical capabilities to monitor and report transactions to the central bank.
