Brazil has announced that the digital currency (CBDC) may be ready by 2022. Banco Central President Roberto Campos Neto said on Wednesday that his country could be ready for a digital currency (CBDC) by 2022.
By then, President Neto said Brazil will have an interoperable instant payment system and a “reliable” and “convertible” international currency. According to him, these features are all the necessary elements to have a digital currency.
Campos Neto also reportedly said that CBDCs are the result of rapidly digitizing financial systems like Brazil’s. Banco Central will roll out the PIX instant payment system in November and launch an “Open Banking” initiative later this year.
Banco Central had already taken an important step towards forming a working group for CBDC to review at the end of August.
Work was Underway for Infrastructure
However, the country has been working a little longer to update its banking infrastructure, developing a technology capable of processing interbank payments practically free and instantly without time limits.
This new system, which should be ready to be implemented in November, could be a major competitor to distributed accounting technologies such as Ripple’s ODL, which wants to establish themselves in Brazil by enabling fast and cheap transactions.
In theory, the PIX could lead to the digital evolution of the Brazilian currency. In statements compiled by the Brazilian newspaper Correio Braziliense, Campos Neto said:
“To have a digital currency, you need an efficient and interoperable instant payment system, an open system to create competition, and a reliable, convertible and international currency. This payment system can be PIX. ”
What is CBDC?
The Central Bank Digital Currency (CBDC) represents the digital form of a fiat currency of a particular nation (or region) and is issued and regulated by the country’s competent monetary authority.
Over the years, traditional banking regulators around the world have struggled to control the growing influence of popular cryptocurrencies such as Bitcoin and Ethereum running on a blockchain network. Such virtual currencies have gained immense popularity due to their decentralized and non-regulatory nature and become a threat to today’s traditional banking system operating under the scope and control of a country’s regulatory authority (such as a central bank).
This is why many leading central banks around the world, unable to control the growth and impact of such cryptocurrencies, are working or designing to launch their own cryptocurrencies. These regulated cryptocurrencies are called central bank digital currencies and are operated by the relevant monetary authorities or central banks of a particular country.