Amid Colombia’s economic growth beat expectations in the second quarter, an official at the country’s tax and customs agency has hinted at some national digital currency plans.
Luis Carlos Reyes, the head of the Colombian Tax and Customs National Authority, claimed that the government of newly inaugurated Colombian President Gustavo Petro will seek to create a digital currency to prevent illicit financial activity like tax evasion.
Colombia’s digital currency plans are part of the country’s new monetary policy measures aiming to increase transparency of financial transactions, the official said in an interview with the local magazine Semana. According to the report, tax evasion in Colombia is estimated to account for 6% or 8% of the country’s gross domestic product so far.
Reyes also pointed out that a potential digital currency would be a major benefit for user experience, stating: “The creation of a digital currency would make these transactions easier for the consumer.”
The official did not specify what kind of digital currency exactly the Colombian government will be looking to launch, a central bank digital currency (CBDC) or rather an asset-backed national currency similar to Venezuela's Petro digital currency project.
Hernando Vargas, technical deputy governor at the central bank of Colombia, previously considered implications of a retail CBDC in Colombia earlier in 2022. The official noted that cash is the preferred instrument of low-cost payments in Colombia, pointing to potential threats from cryptocurrencies and stablecoins in certain circumstances. He stated:
“A line of defense against a widespread use of cryptocurrencies and stablecoins is weaker in Colombia than in other jurisdictions and the discussion about the adoption of a retail CBDC becomes particularly interesting.”
The news comes shortly after new Colombian president Petro has sworn into office on Aug. 7. As previously reported, Petro is known for expressing support for cryptocurrencies like Bitcoin (BTC). Back in 2017, Petro suggested that BTC could remove power from the government and return it to the people. “Virtual currency is pure information and therefore energy,” Petro said at the time.
According to the latest reports, Colombia’s economy beat expectations in the second quarter in a boost for Petro’s government, with GDP reportedly rising 12.6% versus the expected 12.1% growth.
Google parent company Alphabet poured the most amount of capital into the blockchain industry compared to any other public company, investing $1.5 billion between Sep. 2021 and Jun. 2022, a new report shows.
In an updated blog published by Blockdata on Wednesday, Alphabet (Google) was revealed as the investor with the deepest pockets compared to the top 40 public corporations investing in blockchain and crypto companies during the period.
The company invested $1.5 billion into the space, concentrating on four blockchain companies including digital asset custody platform Fireblocks, Web3 gaming company Dapper Labs, Bitcoin infrastructure tool Voltage and venture capital company Digital Currency Group.
This is in stark contrast to last year when Google diversified its much smaller $601.4 million funding effort across 17 blockchain-based companies, which again included Dapper Labs, along with Alchemy, Blockchain.com, Celo, Helium and Ripple.
Google’s increased investment into the blockchain industry is consistent with the other top 40 publicly traded companies, with $6 billion in total being invested during this time, compared to $1.9 billion between Jan. 2021 to Sep. 2021 and $506 million in all of 2020.
The other big corporate investors include asset management company BlackRock, which invested $1.17 billion, investment banking corporation Morgan Stanley, investing $1.11 billion, and electronics company Samsung, with investments totaling $979.2 million.
Like Google, Morgan Stanley and BlackRock adopted a more concentrated approach investing in only two to three companies during the period. However, Samsung was by far the most active investor having invested in 13 different companies.
The data also found that companies offering some form of nonfungible token (NFT) solutions have been the most popular investment:
“Many of these belong to industries such as gaming, arts & entertainment, and distributed ledger technology (DLT).”
The remaining investments have been split between companies that provide Blockchain-as-a-Service (BaaS), infrastructure, smart contract platforms, scaling solutions and digital asset custody platforms.
The data also found that banks have started to increase their exposure to crypto and blockchain companies, driven by an increase in client demand for crypto services. Among the banks finding themselves on the top list of crypto investors are United Overseas Bank, Commonwealth Bank of Australia and BNY Mellon.
United States-based cryptocurrency exchange Coinbase has announced it will be temporarily suspending certain token deposits and withdrawals when Ethereum’s core developers transition the blockchain to proof-of-stake, or PoS.
In a Tuesday blog post, Coinbase product manager Armin Rezaiean-Asel said that during the Merge event, the crypto exchange will “briefly pause” deposits and withdrawals of Ether (ETH) and ERC-20 tokens “as a precautionary measure” to handle the migration. The exchange also warned users against scammers offering ETH2 tokens, saying crypto users did not need to take additional action to receive staked ETH prior to the Merge.
“Although the Merge is expected to be seamless from a user perspective, this downtime allows us to ensure that the transition has been successfully reflected by our systems,” said Rezaiean-Asel. “We do not expect any other networks or currencies to be impacted and expect no impact to trading for ETH and ERC-20 tokens across our centralized trading products.”
The crypto exchange will likely not be the only one to announce precautions or changes in trading activity as the date for the Ethereum Merge approaches. Cointelegraph reported on Friday that though there could be “unforeseen circumstances,” core developers anticipated a tentative Merge date on Sept. 15.
After the Ethereum network transitions from proof-of-work to PoS, many expect its energy consumption will drop precipitously, scalability will improve, and it will be less vulnerable to attacks. Cointelegraph reported on Saturday, however, that ETH gas fees may not necessarily go down and transactions on the network will likely not be noticeably faster than before.
This Daily Dose was brought to you by Cointelegraph.