Brazil’s Central Bank to launch CBDC by 2024

The Central Bank of Brazil has unveiled plans to create a central bank digital currency (CBDC) by 2024. The bank’s president, Roberto Campos Neto, revealed this at a conference hosted by Poder360.

Before widespread use of CBDC begins, the central bank will test the currency on a pilot basis with select financial institutions. According to President Roberto Campos Neto, a digital currency can improve financial inclusion when added to its Open Finance and PIX programs.

In 2020, Brazil’s central bank launched PIX and has seen widespread adoption. PIX has approximately 122 million active users, or 57% of the Brazilian population. Following its success, the Bank for International Settlements praised the effort, which quickly became a benchmark for other countries.

In 2021, Brazil also launched the Open Finance program to enable the sharing of customer data among financial institutions. To date, the program has attracted more than 800 financial institutions and 9.6 million customers.

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President Roberto Campos Neto believes that tokenization of Brazil’s currency could be the next move to boost financial inclusion in the country. He stated, “I think that this digitized, paid and integrated system, with inclusion, will help a lot in the development and inclusion of people in the financial world“.

The road to launching a CBDC

The announcement of a CBDC pilot project comes after Brazil’s Central Bank partnered with nine banks to help develop CBDC. It also comes after the Brazilian Chamber of Deputies approved the crypto-currency bill.

Recall that after almost three years of work, Brazil introduced a crypto-currency bill in February. The Senate approved the bill in April and sent it to the lower house of parliament, where it has been since June.

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The approved bill defines a virtual asset (VA), a broker or exchange, and the federal government departments that should have jurisdiction over crypto-currency-related matters. It also provides for a sentence of two to six years for fraud committed with digital currencies.

If it launches the CBDC, Brazil will join countries like the Bahamas, China, Jamaica and Nigeria, which have launched CBDCs. In addition to improving inclusion, Roberto Campos Neto believes that moving to the blockchain will reduce costs, lower barriers to entry and improve risk control.

This is what we see in this digital economy in Brazil“, he concluded.

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