Brazil Central Bank opens applications for digital currency pilot project

The Central Bank of Brazil is accepting applications for proposals from companies interested in participating in the country’s central bank digital currency pilot, Drex, from October 14 to November 29.

Brazil’s Central Bank announced that it has already approved 13 cases involving complex applications for tokenized real, including government-backed loans, agribusiness assets, assets in public networks, autos, carbon credits, bonds and real estate-related negotiations.

According to the Valor report, the Executive Management Committee of the Drex pilot will receive applications for the use of the digital real token from October 14 to November 29.

This marks the second phase of the central bank digital currency pilot project Drex. The Central Bank wants to increase the number of participants and obtain more complex use cases than those tested in the first phase.

The first phase of testing the pilot project involved 16 consortia, most managed by banks, signing up to use real money on a decentralized digital network through the exchange of bank deposits and federal government bonds in a “tokenized” version.

The bank also noted that applicants should continue testing their privacy solutions, as four participants still failed to solve the problem of “hiding” transactions between participants in a scalable way.

Drex is a digital currency developed by the Central Bank of Brazil that aims to create a “tokenization” infrastructure in the Brazilian financial system.

Regarding the use of digital currency in Brazil, João Pedro Nascimento, President of the Brazilian Securities and Exchange Commission, stated that tokenization is a “permanent” business model and that the crypto industry should be brought into the financial system. A “legislative” way.

Additionally, Nascimento added that integrating traditional financial assets into the blockchain will pave the way for better distribution of investment products.

Brazil’s efforts to develop CBDCs follow a global trend. According to data from the Atlantic Council, some 134 countries are considering CBDC. Brazil is one of 65 countries currently in advanced stages of CBDC development.

As of October 11, China’s own CBDC, digital renminbi, or e-CNY, registered 180 million personal wallets, with total transaction volume equal to 7.3 trillion yuan, or $1.02 trillion.