The largest country in Latin America may soon have its own central bank digital currency (CBDC), as the Brazilian central bank is taking the first steps to create it. Recently, the president of Banco Central do Brasil (BCB) hinted at the possibility of having news "very soon".
No decision has been made as to whether digital Real will be a stakeholder
During an online debate hosted by the Bank of Spain, quoted by Reuters, Roberto Campos Neto stressed that the central bank is "making progress" on the digitization plans of the Brazilian real.
He called on central banks worldwide to continue discussing CBDCs and deepen talks to advance further digitalization of the economy: "We are making great progress in the digital currency process and should have news soon."
However, Campos Neto did not specify details on the progress made by the central bank. But he pointed out that some topics are still in the pipeline, for example whether the "digital real" will be fruitful and what kind of technology will host the CBDC.
Brazil has been studying CBDCs since 2020
Overall, Brazil has seen a surge in the use of electronic payments across the nation as more and more Brazilians continue to adopt more and more mobile solutions for such purposes.
Due to the growing interest among citizens, last year the BCB commissioned a study group to research the CBDC issue to "evaluate the potential benefits and impacts of issuing the Brazilian Real in digital format". The central bank has set the following target:
Among the objectives of the study group is the proposal of a digital currency issuance model that covers risk mapping - including cybersecurity, data protection and regulatory compliance issues - as well as an analysis of the impacts of CBDC on financial inclusion and stability and on economic policy conduct.
And it's not the only country to think about it
That said, the central bank of Brazil plans to assess the feasibility of generating an adequate environment for the development of "financial citizenship" by creating a CBDC:
In addition to reducing the costs of the monetary cycle, a digital currency issued by the BCB can support its strategic objective of "promoting financial citizenship and strengthening the relationship with society and public authorities". An electronic currency can increase the security of cash handling and custody, as well as create monetary policy tools.
And Brazil is not the only nation in the world to think this way. Just a few days ago, we reported how the China is considering making a digital Yuan and how this can put the US dollar in trouble. If the world balance were to change, China could soon become the new center of the world. Furthermore, all the countries that will issue with their digital currency may already be one step ahead of the others.
What do you think of the last words of the president of the Brazilian central bank? Let us know in the comments section below.
