March 29, 2024

The Central Bank of Brazil launches a pilot project of the state digital currency

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The Central Bank of Brazil launches a pilot project of the state digital currency

Brazil's central bank plans to conduct a series of tests of its own digital currency before the end of 2023, promising to make it private and secure.

Coordinator of the Digital Real project at the Central Bank of BrazilFabio Araujo said that the first stages of testing will check the level of information disclosure in the managed blockchain, on the basis of which the digital Brazilian real is going to function. It is necessary to find out whether this level of confidentiality will comply with legal requirements. The security of the infrastructure should also be checked when exchanging digital realities between participants in the pilot project.

During the tests, the Central Bank of Brazil and the Commission forBrazilian Securities wants to understand how third parties will be able to interact with the system and whether banks are ready to issue their own tokens backed by the digital real. This expanded test environment will become available to financial institutions and banks as early as 2024, the developers promise.

Araujo explained that the tests will begin afterthe end of the current phase of research on the digital real, which is currently being carried out within the framework of the open project of the Laboratory of Financial and Technological Innovation of Brazil (LIFT). The pilot involves nine projects working on use cases for a government stablecoin. Organizations participating in the LIFT project must submit reports on the results of their work by April 25.

The Brazilian central bank planned to launchits own digital currency back in 2022. However, the regulator later announced that the launch of the digital real would have to be postponed for several years, since more time was needed to study its capabilities.