Last week Banco Central do Brasil formally announced a delay in its DREX central bank digital currency (CBDC) initiative because it still needs to do more work exploring privacy solutions. In the meantime it plans to launch phase 2 which will broaden the range of use cases, with a call for suggestions expected in the third quarter. Testing of additional applications will happen during the first half of 2025. With this expansion, the governance of the CBDC platform will need to evolve. The Securities and Exchange Commission (CVM) will likely join the governance structure following its observer role during phase 1.
As context, DREX is a wholesale CBDC solution with the digital real used for interbank settlement. The retail facing digital currency is the form of tokenized deposits from commercial banks. The project focuses on enabling programmability and using blockchain and tokenization for financial transactions such as investments.
During the first phase, the DREX platform had only three assets and a single application. The assets were the wholesale CBDC, tokenized deposits and digital treasury bonds (Federal public bonds). Hence, smart contracts written by the central bank enabled their issuance, transfer and settlement. The second stage will become much more interesting with a broader range of use cases. Since it will involve securities, the CVM needs to be involved in the governance.
Article continues …
Want the full story? Pro subscribers get complete articles, exclusive industry analysis, and early access to legislative updates that keep you ahead of the competition. Join the professionals who are choosing deeper insights over surface level news.
