Colombia Explores Creating a CBDC to Combat Tax Evasion

Colombia is considering the introduction of a central bank digital currency (CBDC) to facilitate transactions and reduce tax evasion.

The information was confirmed by Luis Carlos Reyes, head of the Colombian Tax and Customs Office, who did not provide details on the proposal in an interview with the local magazine Semana on Monday.

As part of a tax reform program pushed by President Gustavo Petro, who took office in early August, the government also plans to ban cash transactions for amounts surpassing 10 million Colombian pesos ($2,350).

“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.

Colombia joins other Latin American countries working on their respective CBDCs, including Brazil, Mexico and Peru.