As a researcher with a keen interest in blockchain technology and central bank digital currencies (CBDC), I find the recent announcement by the Central Bank of Brazil about phase 2 of its Drex CBDC pilot project particularly exciting. With my background in data privacy and interoperability, I am eager to see how the applicants will address these crucial aspects, especially considering the Brazilian General Data Protection Law.
As a crypto investor, I’m excited to share that starting from October 14th through November 29th, the Central Bank of Brazil is inviting applications for phase 2 of its Drex central bank digital currency (CBDC) trial program. They are specifically seeking business cases that can be executed efficiently using smart contracts. This presents a unique opportunity to potentially contribute to the evolution of the digital finance landscape in Brazil.
According to reports from CryptoMoon Brasil, while no specific launch date has been announced for the Drex, its coordinator at the Central Bank, Fabio Araújo, suggested that the bank might conduct live tests following the current pilot phase.
Focus on privacy and interoperability
In their application invitation, the central bank made it clear that there’s no restriction on the number of projects their Executive Management Committee might take into account.
In your new proposals, make sure to emphasize a privacy solution that specifically aligns with the Brazilian General Data Protection Law. Additionally, discuss any current or potential legal obstacles that might arise during the implementation process.
So far in the second phase of the pilot, we’ve confirmed 13 instances. As reported in the press, these new use cases encompass various areas such as assigning receivables, securitizing assets using CBDC (Central Bank Digital Currency), facilitating international trade finance, optimizing foreign exchange markets, creating a liquidity pool for public bonds, and negotiations involving automobiles, carbon credits, debentures, and real estate.
In this round of testing, attention will be given to Tokenization and Decentralized Finance (DeFi), as well as examining Drex’s interactions with other networks. This year, the Securities Commission of the country aims to establish a ‘tokenization sandbox’. Araújo stated:
“We will probably adopt as many internal elements as possible into the system and will interoperate only [when] strictly necessary.”
Development is speeding up
In most scenarios, interoperability is likely to be essential since Drex is designed to take over the role of Brazil’s existing real-time gross settlement system, known as Sistema de Transferência de Reservas (STR). Araújo further stressed this point.
“DREX as it is designed will be the STR 2.0. This was already designed in the first phase of the project. We need more details to begin operation.”
In the initial testing round, sixteen groups (predominantly bank-led) participated. Notably, many of these groups were initiated by the Brazilian Banking Association, following the expression of interest from thirteen out of their one hundred eighteen members.
Although a digital real was first proposed in Brazil in 2015, testing only began in 2022.
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2024-10-14 22:06