The Bank of the Republic of Colombia has expressed its position regarding the issuance of a central bank digital currency (CBDC), both in its retail and wholesale modality, through a detailed report.
The report published by the Central Bank of Colombia on its official site, titled “Relevance and risks of issuing a central bank digital currency in Colombia”, evaluates the creation of a CBDC for the Colombian peso, concluding that, for the moment, there are not sufficient reasons to move in this direction.
The report notes that the technical, logistical and security difficulties that would entail the issuance and implementation of a CBDC are significant and could outweigh the potential benefits.
The trend of CBDCs worldwide
The study carried out by the Colombian central bank is part of a global trend where 132 countries, representing 98% of the world's GDP, are actively evaluating the possibility of issuing their own CBDCs. However, despite growing international interest, only three nations have officially launched their digital currencies to date: Nigeria, Bahamas and Jamaica.
In the case of China, the world's second economic power, the development of the digital yuan is at an advanced stage. However, the nation has faced several usage and adoption challenges despite all its efforts to introduce the digital currency into the daily lives of its citizens.
According to the report, in addition to the growing trend of CBDCs among countries around the world, financial inclusion, efficiency in payments and the fight against the informal economy, They are also among the main arguments to evaluate the possible creation and issuance of a CBDC.
However, financial stability risks that could arise if a CBDC is not carefully designed and implemented, including the possibility of digital bank runs or the decrease in financial intermediation, could negatively affect the central bank's ability to carry out its monetary policy. This, according to the bank, outweighs the possible benefits of issuing a digital currency.
The Central Bank of Colombia also highlighted that the objectives of financial inclusion and improvements to payment systems could be achieved through the implementation of other strategies, without the need to issue its own digital currency.
The growing adoption of cryptocurrencies in Colombia
El Central Bank report It also addresses the challenges posed by the growing use of cryptocurrencies and digital assets in Colombia, which ranks 32nd among the countries with the highest adoption worldwide.
Faced with this phenomenon, the central bank proposes to study, in collaboration with other authorities, the introduction of specific regulations for the sector and evaluate how to accommodate the needs of eligible innovative platforms within existing infrastructures.
In summary, the Bank of the Republic's cautious position regarding CBDCs is based on the need to fully understand the potential risks and impact on the traditional banking system that a CBDC could have, in addition to the important role that cryptocurrencies are playing. in the national economy.
