The central bank digital currency (CBDC) issued by Banco Central do Brasil is reportedly set to see the light of day in 2024. Its main purpose will be to boost financial services in the country. Brazil is not the only nation interested in introducing a CBDC, as countries like China, Russia, Japan, Australia, and the United Kingdom have also expressed similar intentions.
According to Reuters, Brazil’s CBDC will be named DREX and is expected to go live next year. DREX will leverage distributed ledger technology (DLT) to settle wholesale interbank transactions, while retail access will be based on the digital equivalent of existing bank deposits. The goal of DREX is to advance the domestic financial network by improving access to monetary services. There is hope that it could also boost investments, lending, and insurance services.
Fabio Araujo, the coordinator of the digital real, believes that DREX will enable simple and reliable access to registered values through DLT technology, reducing costs, and democratizing access to financial services. He pointed out that some Brazilians have already started conducting digital settlements via the payment platform Pix, highlighting the growing interest in digital financial transactions.
It is interesting to note that well-known finance companies have thrown their support behind Brazil’s CBDC project. For example, payment processing giant Mastercard and leading software services developer Sinqia have expressed their interest in the initiative. This highlights the potential influence and benefits that a CBDC like DREX can bring to various sectors of the economy.
As CryptoPotato recently reported, the largest cryptocurrency exchange in Brazil, Mercado Libre, has also joined the CBDC initiative. This move demonstrates the growing acceptance and adoption of digital currencies in the country. With Mercado Libre’s involvement, it is likely that the implementation of DREX will be smoother and more widely accepted by the general public.
Brazil is not alone in its pursuit of a CBDC. Countries worldwide have recognized the benefits and potential of digital currencies. China, for instance, has made significant progress in developing and implementing its CBDC, the digital yuan. Russia has also expressed its intention to launch its CBDC, while Japan, Australia, and the United Kingdom are actively exploring the possibilities.
The future of digital currency in Brazil looks promising as Banco Central do Brasil prepares to launch DREX in 2024. With aspirations to enhance financial services, DREX aims to improve access to monetary services, reduce costs, and democratize financial opportunities for all Brazilians. Supported by major financial players and embraced by the largest cryptocurrency exchange in the country, DREX has the potential to revolutionize the financial landscape in Brazil. As the global trend towards CBDCs continues to gain momentum, it is evident that digital currencies are gradually becoming an integral part of the modern financial ecosystem.