The Central Bank of Brazil announced on Monday the start of a digital currency pilot projectwith the aim of replicating the success of your Pix instant payment system to popularize financial services in the country.
According to Fabio Araujo, coordinator of the initiative at the bank, The public use of the digital currency must begin at the end of 2024, after the end of the test phase – which will include the purchase and sale of federal public bonds between individuals – and its subsequent evaluation.
Araujo said that the “digital real” will be built as a means of payment executed with distributed ledger technology (DLT)to support the provision of retail financial services settled through tokenized deposits in institutions of the financial and payment systems in Brazil.
“This environment reduces costs and brings the possibility of financial inclusion for people. You have services that are very expensive to carry out, such as repo operations, which today are only for banks, but which could be carried out by anyone with a technology based on digital currencies”, said.
“This could reduce the cost of credit, the cost of improving the profitability of investments. There is great potential for new service providers, fintechs, democratizing market access and offering new services.”
Araujo stressed that The Brazilian central bank digital currency (CBDC) concept was not intended to leverage digital payments, as this is already being done on a large scale with Pix, which launched in late 2021 and has been widely adopted in Brazil.
Bank deposits would continue to exist within the Brazilian CBDC, just that they would be recorded in a more modern environment, which means that financial institutions would not lose this source of funds for credit generation.
“Banks are very interested in this new tokenized world, in every conversation we have they have shown a lot of interest”, Araujo said.
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