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- Brazil too has decided to jump in the race with Brazil’s Central Bank or Banco Central do Brasil (BCB) establishing a group which will examine the benefits of CBDC.
- The 12-member study group will do research on how much money they would be able to save should they choose to switch from fiat to digital currency.
- Pix, a central bank-run instant payment platform, is coming online in November.
There are an increasing number of countries throughout the world who are exploring the option of launching its own Digital Currency. A Central Bank Digital Currency (CBDC) as we all know, is a form of a digital payment token issued by the central bank of a country. As per the survey done by the Bank of International Settlements, countries like Canada, USA, China and Singapore have either explored the option of launching its digital currency or doing extensive testing to see the launch of it.
Now Brazil too has decided to jump in the race with Brazil’s Central Bank or Banco Central do Brasil (BCB) establishing its a study group, which will examine the benefits of CBDC.
The 12-member study group will do research on how much money they would be able to save should they choose to switch from fiat to digital currency. According to the Central Bank’s statement, which it released on August 22, there has been a steady increase in the digital banking data and besides the cost effectiveness that digital brings along, the security aspect too is drawing the banks attention.
Digital Real still has its detractors
Having said that, there is still a long way to go before the Digital Real becomes a reality. There is wide speculation amidst many that even if the study group does find the Digital Real feasible, it will still take time to implement it. But ask Rafael Sarres de Almeida, an official from the Information Technology Department of the Brazilian central bank and he would agree that this time round there are still favourable winds blowing in that direction. He feels there is more focussed approach these days with a more practical view on it.
During this Covid-19 pandemic, there has been an increased focus on using the digital medium. With emphasis on reducing cost, Brazil observes that it could well save upon the holding cost, circulation cost of Brazilian reals as well as its printing cost. According to a report, Brazil spends around 90 billion reals annually to guarantee a functional supply of paper money in circulation.
Pix to Measure Brazil’s Financial System
Pix, a central bank-run instant payment platform, is coming online in November. During an interview with the Brazilian TV channel Globo News, central bank’s president Roberto Campos Neto explained that BCB has urged on mandatory participation in Pix. 500,000+ accounts of financial and payment processing institutions in which 90 per cent of all active accounts in Brazil, including the five major banks of the country, Bradesco, Itaú, Banco do Brasil, Caixa Econômica Federal, and Santander, and the digital banks Inter, Initial, and Nubank, are about 30 organizations.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
