Roberto Campos Neto, the President of the Central Bank of Brazil, has confirmed that there will be a pilot testing of the country’s Central Bank Digital Currency (CBDC), dubbed the Digital Real.
The pilot launch, which is slated to go live in the second half of the year, according to earlier speculations, will be limited to a small range of people.
Speaking at an event on Monday, Campus Neto said the value of the Digital Real will be based on the country’s Reserve Transfer System (STR). The STR is an integral part of the Brazilian payments and settlements ecosystem as it aids in the transfer of funds with real-time gross settlement (RTGS).
The proposed Digital Real CBDC will also be based on the STR and will give the participating institutions a similar interface and system that they are already accustomed to.
“We have the STR, a system that liquidates all assets and has the Real as collateral. So we will have a system on top of that, a digital STR, where it will be guaranteed by the digital currency, Real Digital, and banks will be able to issue stablecoins on top of their deposits”, explained Campos Neto.
Campus Neto also noted that the STR system would prevent significant “rupture in the banks’ balance sheets” and comes off as the best cushion for the CBDC. Like other countries, including China, the Bahamas, and Nigeria, Brazil sees the need to accelerate the introduction of its CBDC in a bid to trail technological advances in the financial ecosystem and the benefits they bring.
“The Real Digital initiative responds to the rapid progress of digital transformation and society’s demand for native means of settlement in a new environment, conditions for important efficiency gains to be achieved,” Campos Neto said in a statement last year.
With the belief in the capabilities for digital currencies to co-exist, Campus Neto believes Digital Real will occupy a unique position in the country’s future financial landscape and has tapped the best stakeholders, including Mercado Bitcoin, Aave, and ConsenSys, to make this happen.
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