Brazil Considers Digital Real Currency

The Central Bank of Brazil is fuelling the study of Digital Real as crypto adoption gains traction with leading global economies. The acceleration and digitization of finance have forced governments to act all over the world. It is essential for the Brazilian government to operate sustainably using modern technology and trends. The Central Bank of Brazil is about to issue digital currencies via Central Bank Digital Currencies or CBDCs.

Upgradation of Brazil’s Economy

In creating Digital Real, the bank wishes to upgrade Brazil’s economy evolving alongside the dynamic crypto technology. It will improve the retail payment system. And open the country to more international and regional transactions and economic participation, thereby fostering widespread business relationships worldwide.

Fabio Araujo, a representative of the Banco Central do Brasil (BCB) before the Committee on Science, Technology, Innovation, Communication and Information Technology of the Brazilian Senate, has announced that the developmental stage of a Digital Real is nigh possible. Araujo emphasized the still debatable stage of its creation. 

Also Read: Forex and CBDC: Exploring the Empowering Partnership

Debate Over Digital Real Work 

According to the public statements issued by Fabio Araujo, a representative of the Central Bank of Brazil. Araujo stated at a recent public hearing with the Science and Technology Senate Committee, the central financial institution is still researching and analyzing the ways of implementing a central bank digital currency (CBDC) and how it would play out in society.

Araujo said, “Our goal is to clarify what demands society presents to Real Digital. After that, we will soon move on to the testing phase with proof of concept and possibly an innovation laboratory, and this should take place throughout 2022.”

Araujo also announced that the Central Bank of Brazil has been actively meeting with various companies to help them curate the design of the final Digital Real project. According to Senator Cunha, conducting such meetings play a vital role in crypto education thereby making the process of crypto adoption and dealing with digital currencies more efficient. 

He iterates, “We need to debate this topic. Digitization is a reality in the lives of the population, in various fields. But, there is still no clearer information on how this will happen regarding the money in circulation in Brazil.”

Central Bank Digital Currencies Or Cryptocurrency

The warm welcome for a virtual Real CBDC. It does not necessarily spike up the approval rate of cryptocurrencies like Bitcoin and Ethereum. This is further proven as the Central Bank of Brazil continues to take a negative stance regarding this matter. Araujo said:

“CBDC shouldn’t be seen as crypto actives. These are speculative assets and come with high risk due to their volatile nature and digital existence that cannot be translated into reality.”

Also Read: Bitcoin Price Sky-Rocket to New Heights in 2021

Conclusion

However, even though the Central Bank of Brazil is in the midst of the research phase of a hypothetical Digital Real, it has already made provisions for it and has come up with general guidelines telling us to expect it around May. This goes on to prove that there is a considerable amount of interest in the subject. This puts Brazil ahead in the CBDC investigation in Latam- a low priority for other central banks as of now.