More countries decide to issue their own digital currency via the central bank, i.e. Central Bank Digital Currency (CBDC). There are many indications that he will also join this group Brazyliahowever, this will not happen until 2022. However, the first steps in this direction are to be taken in November.
The shift towards digital currencies
As the president of the Central Bank of Brazil (BC), Roberto Campos Neto, argues, the future of the financial system should be looked for in digital currencies.
Over the next two years, there are plans to modernize the country, such as the introduction of instant bank payments, open banking and the transformation of exchange rate. These are prerequisites for the introduction of digital currency.
Digitizing the Brazilian financial system
In the case of Brazil, the issuance of its own digital currency would be a natural consequence of the already implemented process of digitization and modernization of the financial system, initiated by the central bank. However, CBDCs differ from the others cryptocurrencysuch as even bitcoin. Ultimately, they are to constitute only a new form of representation of the traditional national currency. Thanks to this, they form an important element of monetary policy. In other words, CBDCs are the digital version of a fiat currency.
Brazil is preparing to introduce CBDC
The first solutions that are to finally lead to the launch of the digital currency are to be implemented in November, and we are talking about immediate bank payments.
The implementation of open banking is planned by the end of the year. These activities are aimed at increasing the level of competition within the national financial system. The bill on the modernization of the Brazilian monetary system, submitted in 2019, which is to be voted on, is also very important for the ongoing process.
The management of the Central Bank of Brazil estimates that the issue of the digital currency will be possible in 2022, provided that all necessary conditions are met. In addition, the BC established a special group that was tasked with thoroughly analyzing all the potential consequences of introducing the digital currency in the country. It is to present its conclusions within a year.