On 21 August 2020, Brazil’s central bank announced its intention to set up a world-wide study on the issuance of central bank digital currencies (CBDC). Brazil recognizes the impact a digital Real could have on the country’s financial system, and as such wants to find a balance between using CBDC to improve society’s financial wellbeing, as well as tackling the potential risks which are ‘inherent in this new form of payment.’
The study’s general objective is to look into improving commercial transactions between private and public entities, nationally and internationally. Other features of the study include exploring a potential model for a CBDC, its scope, societal benefits, and national challenges. In terms of security, the study plans to examine various cybersecurity, data protection, and regulatory compliance risks.
This is not the first time Brazil’s central bank has demonstrated enthusiasm in the newest technological trends. In April this year, it launched PIER, a blockchain platform used to seamlessly exchange data between regulatory authorities and financial institutions.
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