How is the project for the elimination of the three zeros going?

The new president of Colombia, Iván Duque, has said that he sees no sense in giving the green light to the project that seeks to eliminate the three zeros from the national currency. For him it is costly and unnecessary. Asobancaria bets more on accelerating the process of implementing a new family of banknotes.

Last June 20, the plenary of the House of Representatives approved in second debate the initiative presented by the Government to eliminate three zeros to the currency, which does not have the approval of the new President Iván Duque, who has said that it seems costly and unnecessary.

It must be remembered that for this project to become a Law of the Republic it must be approved in four debates. This means that the current Congress did not have enough time to make the wish of the Santos Government and the Minister of Finance, Mauricio Cárdenas, come true, since the two remaining debates must be assumed by the new Congress of the Republic that will take office on July 20.

“I hope the next government does not let it sink because this would make life easier for all Colombians without additional costs of printing banknotes”.

After this approval, Mauricio Cardenas, told the media that he wished the next Government would not let it sink because this would make life easier for all Colombians without additional costs of printing banknotes. “The bills that already exist, the new family no longer has the three zeros, it has in small print the word thousand that would be erased once the bill is approved and enters into force as of January 1, 2020”, said the minister.

Iván Duque, for his part, said in the microphones of Blu Radio that he would not walk to this project since he does not see it necessary. “I do not see the sense in it, among other things because three years ago they spent a little money making the renewal of banknotes. I also believe that switching to this new denomination will take time, it is costly and, finally, I remember that when Mexico did the exercise, this has a psychological impact on the consumer, at least 18 to 24 months,” he said.

Asobancaria bets on a new family of banknotes and not to eliminate the three zeroes

For the president of Asobancaria, Santiago Castro, it is not the right time to eliminate the three zeros from the peso. “The country has been immersed in the process of implementing a new family of banknotes for three years, with a level of execution still below 30% and in full coexistence with the old family of banknotes,” he said.

For him it is also difficult to make compatible a very short transition period, such as the one required to confiscate illicit money, with the time necessary for the elimination of the three zeros to have enough pedagogical, operational and technological diffusion to avoid traumas in the economy.

The trade union leader stated that after a cost/benefit analysis of the proposed proposals, they find that the measure is costly and inefficient. “A multi-currency system such as the one that would be derived from a new denomination without three zeros, would be inefficient and costly in transactional matters, constituting a clear setback in the solidity and simplicity for the payment ecosystem”, Castro pointed out.

The best option, from his point of view, would be to deepen and accelerate, between one and two years, the implementation process of the new family of banknotes, which banks would be willing to support.

What are the benefits of eliminating the three zeros?

– It simplifies accounting in books and electronic media.

– Facilitates the handling and recording of figures.

– Reduced transaction costs.

– Less typing time.

– Easier reading of financial statements and accounting documents.

– Decrease in storage requirements.

– Equalization in terms of unit of account with commercial peers.

– Reduces the phenomenon of monetary illusion due to the presence of larger zeros, which tends to generate inflationary pressures.

Source: Actualícese: Actualícese