Brazil to Launch CBDC Trial With 14 Entities

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  • Brazil has selected the entities it wants to help with its CBDC trials this year
  • Local banks will join the likes of Microsoft and Visa in testing the new system
  • The ‘digital real’ system is not intended to rival traditional payments

Brazil’s central bank is set to launch a CBDC trial with 14 institutions, including banks and well-known companies such as Visa and Microsoft. Starting in mid-June, Banco Central do Brasil will gradually integrate the chosen participants into the Real Digital Pilot platform, having received a total of 36 proposals of interest from over 100 institutions representing various financial sectors. The test phase will include the buying and selling of federal public bonds, with public use of the CBDC slated to start at the end of 2024.

Visa and Microsoft to Join Local Banks in Test

Banco Central do Brasil published its list of chosen entities this week, having received interest from payment institutions, cooperatives, public banks, cryptocurrency companies, and financial market infrastructure operators, among others. Prominent local private banks such as Bradesco, Nubank, and Itaú Unibanco have been chosen, along with the local stock exchange B3.

Global giants Visa and Microsoft have also been selected to participate alongside other private companies. The “digital real” is intended to support the provision of retail financial services settled through tokenized deposits in institutions of the financial and payment systems in Brazil, with CBDC coordinator Fabio Araujo saying that that the use of distributed ledger technology “reduces costs and brings the possibility of financial inclusion for people, ” with other benefits also visualized:

This [ a CBDC] could reduce the cost of credit, the cost of improving the return on investments. There is a great potential for new service providers, FinTechs, democratizing access to the market and offering new services.

Unlike other CBDCs, Brazil’s digital real is not intended to leverage digital payments, something that is already being done on a large scale with Pix, a digital payment platform that was launched at the end of 2021 and has been widely adopted in Brazil.