Roberto Campos Neto, the President of the Central Bank of Brazil, shared the plans regarding digital Central Bank currency (CBDC). A possible starting point is 2022.
The Banco Central do Brasil is not the only central bank that currently works on digital currencies. At present, 80% of central banks worldwide research possibilities to implement their own CBDCs (Central Bank Digital Currency), and 40% have already started pilot projects, whose aim is to research a digital central bank currency more in-depth. An excellent example of this is China that wants to issue its digital Yuan before the Olympic Games 2022. Thailand has completed test runs for big enterprises performing payments in CBDCs.
Why a digital central bank currency?
The President of the Central Bank of Brazil shared the plans regarding CBDC in a Bloomberg interview. He describes a CBDC as a “reliable, convertible, and international currency.” An introduction of a digital central bank currency is a logical consequence of the last year’s developments and the next step of modernization.
A digital central bank currency differs fundamentally from cryptocurrencies like bitcoin, as it is actually a digital representation of the existing country currency.Roberto Campos Neto, the President of the Central Bank of Brazil
As Roberto Campos Neto took his current position in 2019, he took care for the introduction of BC#-Agenda, which should have promoted the state’s financial democratization.
Banco Central do Brasil wants to stabilize and renew the state’s financial system with the help of this agenda. The program further develops the Agenda BC+ and should improve/boost the following points:
Among the rest, access to the financial system will be facilitated to allow private persons to become active in the credit market. With this program’s help, the whole financial system will generally be more straightforward, and all the government interventions will become unnecessary.
No clear date yet
Together with the planned PIX-Transaction System (Brazilian Instant Payment Scheme), which should go online in November this year, Brazil will get prepared for the introduction of the digital central bank currency. The exact start point is still open. Roberto Campos Neto is sure that the Brazilian central bank will be ready in 2022. At present, some politics is required: they should pave the way. Banco Central has already started the necessary clarifications and planning. According to Neto, in approximately one year, they will release the results of their research on the effects and the potential of CBDC.
More about the general CBDC developments and plans around the globe find here.