Brazil Will Use Real Digital For Payments

Brazil uses digital real for wholesale payments within the country. (photo: Unsplash)

JAKARTA – Several countries have begun to develop a central bank digital currency (CBDC) to stem the rate of cryptocurrency, one of which is Brazil. Brazil's CBDC, Real Digital, plans to use it for wholesale payments.

In addition, the central bank also stated that its CBDC would not be used for retail purposes. The statement was made by the President of the Central Bank of Brazil, Roberto Campos Neto at a crypto conference held in Rio, Valor's Crypto Summit Rio 2022.

“Banks will be able to issue stablecoins on their deposits and will develop technology for it, they have to invest because they can make a profit. And once they develop it, the protocol for issuing stablecoins on deposit will be essentially the same as monetizing various other digital assets,” said Neto.

Furthermore, the President of the Brazilian Central Bank explained that real digital would have unique uses compared to other CBDCs. Digital real is aimed at monetizing assets without harming the credit function of private banks and using them as collateral.

Bitcoin.com News reports that Campos Neto is also including tokenization as one of the possible processes by which CBDCs can improve the domestic economy. Campos Neto refers to mortgages and says that implementing a tokenization model can make paying or getting a reverse mortgage an easier task, reducing costs as well as waiting time, and simplifying the paperwork.

In this regard, Brazil has just launched the Brazilian Blockchain Network, a project that aims to build a common base for other domestic institutions to build projects on the network. The project may also use tokens and digital real estate in the future to achieve the expected goals.

On the other hand, Campos Neto also criticized the lack of coordination experienced by the central bank in the CBDC development process.

“When I meet with other central banks, I see that some are trying to develop decentralized systems, and others are talking about the automation of multi-tiered payment systems… If you have developed in this uncoordinated way, it can never be better than a crypto platform centralized", he concluded.