Roberto Campos Neto, who is the current President of the Central Bank in Brazil, Banco Central, announced that the people of the country could soon expect the formation of central bank digital currency or CBDC set up in the country within three years. According to a news report released in September 2020 by the news agency Correio Braziliense, Brazil could see the CBDC set up by 2022. In a statement, the President of the Banco Central announced that the Central Bank has started to take important measures and implement innovative technology to modernize the country’s financial system. All of these measures would make the formation of CBDC inevitable. He announced the introduction of the PIX instant payment system, introducing open banking, in addition to many other measures.
From November, the Central Bank will launch the quick individual to individual and inter-business transactions that will take just ten seconds or even less. Different options that will be made available include a mobile phone, internet banking, or ATM. The proposed open banking system will make the banks’ swapping of information easy, allowing customers to change their banks from one to another with minimum paperwork. Campos Neto further stated that CBDC would be able to distinguish itself from other cryptocurrencies such as Bitcoin as it will be backed by a trusted national monetary regulator.
Banco Central is already working on the fundamentals of CBDC. The bank has created a team of experienced professionals to ass the different areas of digital payment systems and how it can fit into the country’s existing national payment systems. The team is also given the job to assess how the new digital currency will impact its economy. The team is expected to present its findings within a year.
The country is already working on updating the banking infrastructure besides implementing technology that will allow the processing of interbank payments instantly and for free. The Brazilian new system called PIX should be up and running by November 2020. This would lead to competition with other distributed ledger technologies such as Ripple’s ODL that were looking to establish themselves in the country. PIX will bring about a major digital evolution in the banking industry and boost the economy.
Campos Neto also added that introducing digital currency in Brazil would make their instant payment system more efficient. The open system will lead to creating competition and that, too, with a trusted currency that is credible, convertible, and globally accepted. This would easily pave the way for a digital currency that would be introduced by 2022.