Brazil To Begin CBDC Pilot in Second Half of 2022

Key Insights:

• Brazil’s central bank chief says the CBDC pilot would begin in the second half of 2022.
• The CBDC will be guaranteed by the Brazilian real, and banks can issue stablecoins upon deposits.
• Brazil chose nine projects in March, including Aave, Visa, and Microsoft, to develop CBDC.

The Central Bank of Brazil chief said Monday that it would begin the CBDC pilot later this year.

The President of Banco Central do Brasil (BCB), Roberto Campos Neto, announced the move during an event presented by TradersClub (TC) and Arko Advice.

Neto said that Brazil would start piloting its central bank digital currency (CBDC) in the second half of 2022.

CBDC Pilot Roll Out Coming Soon

The central bank gave a hint in November 2021 that it would roll out the CBDC pilot this year. However, earlier reports say that the asset will not be ready for use until 2024.

According to Neto, the sovereign national digital currency would be pegged to the country’s official currency— the Brazilian real (BRL). He also confirmed that the CBDC dubbed “Digital Real” would have a fixed supply, similar to Bitcoin.

“This is a way of creating the digitalization of the currency without creating a rupture in the banks’ balance sheets. This project should have some kind of pilot in the second half of the year.”

Neto stressed that the bank has been exploring and studying the process of CBDC for a long time. He believes that crypto is more prominent as a form of “investment rather than payment” but could change with broader adoption and acceptance.

It is unknown whether the pilot project would make the CBDC available to the public or would restrict the asset to the central bank itself.

Brazil Picks up Pace in the Crypto Marathon

The central bank joined hands with nine partner projects to complete its CBDC goals. Announced in March, the selected partners include Aave, a DeFi lending platform, Visa of Brazil, ConsenSys, and Microsoft.

Brazil has been catching up pace in the crypto space by introducing various “pro-crypto” measures. CBDC development isn’t Brazil’s only crypto-related pursuit. The city of Rio has been at the forefront of the crypto adoption movement.

Rio de Janeiro announced that it would allow its citizens to pay their real-estate taxes in cryptocurrencies. Additionally, the city plans to expand its crypto-friendly measures to stimulate arts, culture, and tourism.

Rio Secretary of Finance and Planning Pedro Paulo stated last month,

“Going further, we will use these crypto assets to stimulate the arts, culture, and tourism, through NFTs, and create a sound and responsible governance policy to evaluate the realization of crypto investments.”

The city announced early this year that it would buy Bitcoin as a store of value for city reserves. The seaside city said it intends to invest 1% of the Treasury in Bitcoin, and the mayor of Rio, Eduardo Paes, has promised to launch its coin dubbed “Crypto Rio.”