The success of the Drex pilot and its eventual large-scale implementation will depend on the Central Bank of Brazil’s ability to develop robust privacy solutions that meet regulatory and operational requirements.
The Central Bank of Brazil decided to expand the pilot of its digital currency of the central bank (CBDC), Drex, to new consortiawith the purpose of testing more advanced use cases and evaluating privacy solutions in this second phase of the project. In this sense, thirteen use cases were confirmed, including carbon credits, agricultural bonds and foreign trade platforms.
Brazil is preparing to intensify activities related to Drex, with the recent opening to new participants. Proposals to join the pilot may be submitted from October 14 to November 29, where they will be evaluated by the executive management committee.
The approved proposals will be added to the thirteen previously selected use cases, which cover applications such as credit collateralization, government-backed loans, international trade finance and carbon credits.
The new phase and use cases
In this new phase, the sixteen consortia that have already participated since the first stage of the pilot will also be incorporated. A key aspect is the incorporation of privacy solutions that guarantee Drex’s operational security.
Flaws in the privacy proposals presented in the first phase led the Central Bank to postpone the full implementation of Drex until 2025allowing the time necessary to test these new use cases.
However, its large-scale implementation, which would include the general population, will depend on the effectiveness of privacy solutions.
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Although Drex’s 2025 launch was previously anticipated, that date now appears unlikely to be met due to tight timelines.
In the announcement of this new stage, the president of the commission equivalent to the SEC in Brazil, Joao Pedro Nascimento, highlighted that tokenization represents a business with a future, and stressed the need for cryptocurrencies to be integrated into the financial system in a regulated manner. .
Source: Ambito
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