Yesterday cryptocurrency exchange Mercado Bitcoin announced that the Stellar Development Foundation is joining its central bank digital currency (CBDC) consortium that’s involved in Brazil’s LIFT Challenge for a digital Brazilian Real. The Central Bank of Brazil had previously stated that a digital Real pilot could start in the fourth quarter, consistent with Stellar’s reference to the second half of 2022.
In March, the central bank and Fenasbac, which runs the LIFT Lab for innovation, unveiled the nine CBDC Challenge consortia participating in the trials.
The challenge is exploring various potential use cases for a digital currency. In some ways, the Mercado Bitcoin consortium might be the most straight forward in that it aims to demonstrate delivery versus payment (DvP) or instant settlement for crypto-assets. Of course, that’s something that happens all the time with stablecoins. Other participants in the Mercado Bitcoin consortium include Bitrust and CPqD.
“We are in a consortium of companies that have the structure and ambition to build robust solutions for the financial market through blockchain technology. Utilizing the Stellar network will allow us to deliver a complete case for evaluation by the Central Bank,” said Reinaldo Rabelo, CEO of Mercado Bitcoin. The Stellar Development Foundation argues that the Stellar blockchain is particularly suited to the application because its network is optimized for payments.
In January 2021, the Stellar Development Foundation (SDF) signed a deal with Ukraine’s Ministry of Digital Transformation to develop both a CBDC and work on stablecoins. In December, it was announced that Stellar was working with TASCOMBANK and currency technology provider Bitt on a Ukrainian e-money pilot to be used by a government organization.
Despite the war that broke out in February, the CEO of the Stellar Development Foundation told Coindesk that the Ukraine project was proceeding, albeit with some disruption.