Today blockchain developer SETL announced it joined one of the digital real pilot consortia led by Banco Bradesco, which also includes interbank clearing house NUCLEA. It follows the May announcement by the Banco Central do Brasil of the 16 participants in its central bank digital currency (CBDC) simulations. Additionally, last week it unveiled the new digital real brand, Drex.
Given Brazil already has a robust retail mobile payment system, Pix, the focus of the Drex work is on an interbank CBDC. Retail access will be enabled by bank deposit tokens and tokenized emoney in the case of payment providers. The key objective is to lower the cost of financial services and expand the range of options by encouraging blockchain and tokenization. Hence the need for an onchain settlement asset.
The cryptocurrency arena offers transparency which comes with the downside that everyone’s transactions are visible if you know their wallet address. Hence, one of the goals of the current CBDC work phase is to explore privacy solutions and also to enable programmability, particularly for atomic settlement.
SETL is one of the founders of the Regulated Liability Network (RLN) and the company behind the RLN technology. One of its goals is to support interoperability between different blockchain technologies. In this case, the core digital real network uses Hyperledger Besu (enterprise Ethereum).
“SETL’s rich history of successful collaborations with central banks and Tier 1 institutions globally equips us with invaluable insights to benefit this pilot,” said Anthony Culligan, CEO of SETL. “As a rapidly developing economy, Brazil stands on the brink of financial innovation that SETL can help drive.”
When the central bank first announced the pilot participants, there were 14 groups. Since then, it has added another two, with Microsoft now involved in four of the 16 consortia. The two additions are:
- Caixa, Elo and Microsoft
- MBPay, Cerc, Sinqia, Mastercard and Banco Genial
Additionally, last week Drex was announced as the new branding. The first two letters stand for Digital Real, “e” for electronic, and “x” for modernity.