Brazil tests digital Real CBDC on public blockchain

Brazil’s Central Bank will launch the country’s CBDC in 2024. Currently the digital Real currency is in the testing phase. The Digital Real is an innovative way to introduce a national virtual currency by simply tokenizing bank deposits. The IMF too has praised this concept.

Tokenizing bank deposits is an easy way to introduce digital currency and makes for efficiency while complying with existing regulations for deposits.

The latest test of Real involved actually buying an asset for payment (delivery versus payment). The test was done by crypto exchange Mercado Bitcoin and the Stellar blockchain. The transaction was “atomic”, meaning the transfer of asset and payment happened “simultaneously”. The test forms a part of the LIFT Challenge, the name given to the trial period. The current test was done on Stellar network, which provided the wallets, keys, issue of digital assets and the atomic settlement. Stellar is known for high speed and low costs. The LIFT challenge includes participants like Visa and G+D.

The testing for Real involves mostly institutions, including crypto organizations like Aave Labs. The “thesis” to test in the latest atomic transaction was to see if it was viable and safe to carry out such a transaction.

Brazil’s CBDC is designed for wholesale use with merchants in mind, who can use these bank deposit tokens. Its utility lies as a reserve asset to back stablecoins, thus facilitating payment service platforms.


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