The final list of 14 participants was drawn up from 36 offers submitted by individuals and collaborating entities, totaling more than 100 institutions.
The digital currency of the Central Bank of Brazil will initially focus on wholesale interbank transaction payment solutions. The Banco Central do Brasil plans to include more participants in its digital currency scheme. The list, published by the bank on May 24, includes the names of all the participants with whom the actual digital CBDC will launch.
It should be remembered that in 2022, the Brazilian CBDC pilot was officially announced, revealing the plan to create a real digital pilot. This digital currency would be linked to the national fiat currency, the real, ensuring a stable value. To maintain control and manage its supply, the digital real would be minted gradually over time, resulting in a fixed and limited issuance of the currency.
Brazil Digital Real Pilot Will Start with 14 Participants, including Visa and Microsoft
Intending to fully launch in 2024, Brazil’s central bank announced the start of its Central Bank Digital Currency (CBDC) last year. The initial purpose of the solution is to facilitate wholesale interbank transactions, and it will eventually be accessible to customers through tokenized bank deposits.
The CBDC solution aims to make transactions settle instantly and reduce overall transaction costs. This phase of the digital real-world pilot aims to test the privacy and programmability features to ensure that the process of sharing information between various participants on the platform is easy. It will also test the programmability and interoperability of the services offered by the participants.
Participants in the recently published list include both individual entities and collaborators. They include names like Bradesco, Banco Inter, Microsoft and 7comm, XP and Visa, Hamsa and LoopiPay, Itaú Unibanco, Microsoft in collaboration with other institutions, and the Bank of Brazil.
The list includes a wide range of organizations, including cooperatives, public banks, payment solution providers, financial market infrastructure operators, crypto asset service providers, and payment agreement providers.
With all of these entities in place, Brazil’s central bank intends to add the chosen participants to the digital pilot platform by June 2023.
With a population of 214 million, the largest country in Latin America continues to attract global cryptocurrency companies. Its size and importance make it an attractive destination for companies in the cryptocurrency industry.
Brazil CBDC Pilot to Initially Focus on Wholesale Payment Solutions
Brazil’s CBDC, real digital, is an extension of the physical Brazilian currency. It can be exchanged for traditional currency and will have the same price and value as traditional currency.
This initiative will promote greater inclusion of Brazilian citizens in the financial system. The solution combines the features of fiat and digital currencies, allowing the digital currency to benefit from the price stability attributes of fiat currencies while leveraging Blockchain technologies for faster and more secure transactions.
One of the reasons the solution focuses primarily on wholesale rather than retail transactions is that Brazil already has an established digital payment system, Pix. Pix is already one of the largest eCommerce payment solutions in Brazil, launched in 2022 and currently used by more than 60% of Brazilians.
Rather than trying to compete with this established solution, Banco Central do Brasil will follow the Pix model in other areas of financial services, particularly at the wholesale level.
By Audy Castaneda
