Roberto Campos Neto, Governor of the Central Bank of Brazil, revealed the development status of the Digital Real, the Bank’s digital currency (CBDC). Campos Neto said that pilot tests are about to begin and that in the future the bank should digitize more balances.
A pilot test of the digital real is imminent
Brazil is moving forward with the development of the Central Bank Digital Currency (CBDC) and the design of its architecture. Roberto Campos Neto, President of the Central Bank of Brazil, recently detailed the progress his institution has made in building the infrastructure to operate the proposed digital real currency.
At a conference organized by Brazilian bank BTG Pactual, Campos Netosaid that pilot testing of the digital real is “now” underway and that the project has received significant support from private banks. Campos Neto estimated that the project’s full development route should be completed by December 2023, when his term as president of the bank ends.
Campos Neto also commented that with the introduction of this currency, the bank will have more digitized assets as part of its balance. Brazil’s CBDC model means that each bank can issue this currency backed by regulated deposits.
A New Vision for Finance
Campos Neto also elaborated on his vision of a fully digital financial system envisioned for Brazil in the coming years; for Neto, the digital real is merely a further fragmentation of the Brazilian structure and is not a replacement for the current Fiat Payment Initiative PIX and the Open Finance project, which aims to enable seamless interconnection of banks.
Neto believes that this platform may change the current state of personal finance in Brazil. He states that,:
These three have changed the history of financial intermediation in Brazil, made our system more efficient, and there is probably nothing more advanced in the world today.
On February 6, Fabio Araujo, project coordinator at the Central Bank of Brazil, explained how these first tests will be conducted. The pilot tests will focus on evaluating the degree of security that the currency will bring to users and whether the level of privacy complies with current regulatory standards.
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