This week, the Banco Central do Brasil announced the list of selected participants for its central bank digital currency (CBDC) pilot, the digital real. The first phase will focus on privacy and programmability features, testing the settlement of government bonds. Transactions will involve the simultaneous exchange of cash with title to the bonds or delivery versus payment (DvP).
Brazil has no plans for a retail CBDC, so the trials will use the CBDC for interbank transactions, with the consumer-facing element using tokenized bank deposits. Hence the list has many banks, including some participants in the previous LIFT Challenge, such as Visa, Santander, Itaú and B3.
The CBDC aims to support DLT, providing on-chain currency to enable securities transaction settlement.
Digital real pilot
According to the announcement, the central bank received 36 proposals from more than 100 institutions across various financial sectors, including commercial banks, payment institutions, and crypto firms. The pilot had initially planned for only 10 participants, but in the end, 14 groups were selected. They will begin onboarding into the Digital Real Pilot Platform next month.
During the pilot, simulated transactions will test instant settlements at the wholesale and end-customer levels using DvP settlement of government bonds. The simulations will allow the central bank to assess privacy features in the exchange of information between the various parties, as well as the ability to add programmability functions and their interoperability.
Following the selection criteria established earlier this month, the central bank chose 14 teams for its digital real pilot:
- Banco Inter, Microsoft and 7Comm
- Santander, Santander Asset Management, F1RST and Toro CTVM
- Itaú Unibanco
- Basa, TecBan, Pinbank, Dinamo, Cresol, Banco Arbi, Ntokens, Clear Sale, Foxbit, CPqD, AWS and Parfin
- SFCoop: Ailos, Cresol, Sicoob, Sicredi and Unicred
- XP, Visa
- Banco BV
- Banco BTG
- Banco ABC, Hamsa, LoopiPay
- Banco B3, B3 and B3 Digitas
- ABBC: bancos Brasileiro de Crédito, Ribeirão Preto, Original, ABC, BS2 and Seguro; ABBC, BBChain, Microsoft and BIP
- Banco do Brasil