According to Maghnus Mareneck, CO-CEO of Interchain Labs, the Colombian government will test CBDCs that have not yet been announced in the COSMOS network. Colombia aims to target cross-border payments with this new CBDC. This CBDC was just born out of stealth with this announcement.
Columbia jumps into a CBDC bandwagon with stealth CBDC pilot
Colombia will become the latest country in Latam to experiment with the creation of central bank digital currency (CBDC). In an interview with Street, Interchain Lab co-CEO Magnos Malenek revealed that they are working with the bank and the Colombian government consortium on the co-pilot of this unnamed currency.
Mareneck was scarce in CBDC details, but revealed that the currency targets cross-border payment use cases and runs on Cosmos using IBC Eureka.
Mareneck has strengthened the relevance between leveraging COSMOS and IBC EUREKA for this project, as it is part of a technology stack that can be used personally by the Colombian government without relying on public infrastructure.
“Imagine you’re the president and you’re suffering from hacks. You’ll be responsible. So having the technology they can understand and change is the most important thing when it comes to security assumptions,” Malenek said. “If your blockchain has validators that are all the institutions you trust, then you don’t need to trust others except for those who are sending assets,” he added.
CBDC uses private and permitted validators over public networks like COSMOS, allowing the Colombian government to expand its network, including more virters, such as banking institutions.
The Colombian system follows trends established by other financial institutions and banks. Other financial institutions and banks have also chosen this route, avoiding building systems directly on public networks.
With this announcement, the project will be born out of stealth, and Colombia will join other countries such as Brazil, Peru and Bolivia in this CBDC and digital currency research.
Read more: dollarization Watch: Bolivia launches digital currency to tackle cross-border payments
Read more: Peru Central Bank develops digital currency