Yesterday Banco Central do Brasil announced it chose nine applicants for its central bank digital currency (CBDC) competition, the Real Digital Lift Challenge. Lift, the bank’s innovation lab, whittled down the participants from 47 proposals.
The initial brief for participants was to submit applications that involved
- real-time settlement of tokenized assets (delivery versus payment or DvP)
- currency exchange (payment versus payment or PvP)
Additionally, it was interested in projects that explored offline payments where both parties lack internet access. The participants are a mix of cryptocurrency applications and enterprises.
- Aave – the public blockchain DeFi lending protocol
- Mercado Bitcoin, Bitrust and CPqD – DvP for crypto assets
- Banco Santander Brazil – using DvP for tokenized vehicles and other assets
- Febraban (Brazilian banking federation) – DVP for financial assets
- Giesecke + Devrient (G+D) – the central bank provider in a project for dual offline payments
- Itaú Unibanco, Brazilian stock exchange B3 and R3 – PvP for international payments
- Tecban and Capital – an e-commerce logistics solution that uses IoT
- VERT, Digital Asset and Oliver Wyman – rural financing
- Visa Brazil, ConsenSys and Microsoft – SME financing using DeFi
Two of the teams, G+D and Visa, were winners of last year’s Global CBDC Challenge run by the Monetary Authority of Singapore.
Banco Central do Brasil launched a CBDC research project in August 2020 and said it might be ready to launch a CBDC in 2022. These applications seem to encourage the usage of CBDC for crypto and institutional applications rather than retail. That might be because Brazil recently launched PIX, a retail real-time payment system.
In April 2020, the central bank created PIER, a blockchain-based solution to exchange data between regulators and financial institutions.