The Central Bank of Brazil has selected 14 institutions, including Visa and Microsoft, for its CBDC pilot program, a digital real.
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The upcoming pilot project will involve both national and global companies such as Itau Unibanco, Bradesco, B3 local stock exchange, Nubank and Banco do Brasil. The Central Bank published the final list of CBDC pilot project participants on May 24, 2023, and participants will be added to the digital real platform around mid-June 2023.
Participants were selected from a pool of 36 applications submitted by individual companies and consortiums. Although the final number of participants is 14, some participants represent groups of companies, including Microsoft and digital technology company 7COMm. Visa, Santander and several Brazilian banking institutions will also take part in the pilot program. The current phase of the digital realm will focus on testing the privacy and programmability features of the platform with one use case, namely the delivery and payment protocol for federal government securities.
Public use of digital real
According to thecoinrepublic.com, CBDC will be available for public use by the end of 2024. This is because the project will need to go through an extensive testing phase that will involve buying and selling federal government bonds to individuals.
The digital real will use distributed ledger technology (DLT) and will be fully supported by the Central Bank of Brazil and the Brazilian Monetary Authority. In addition, CBDC will be an extension of the traditional currency and will have the same value as the traditional real.
Other CBDC efforts around the world
Several other countries from around the world are working on their own central bank digital currencies, including China, the UAE, Russia, and possibly Canada.
In March 2023, the UAE Central Bank announced its plans to complete the first phase of the central bank digital currency project in mid-2024. This new CBDC strategy will include bilateral ties with the Asian country as well as launching a proof of concept for issuing a CBDC. The strategy will include three distinct phases that will facilitate the launch of the digital dirham.
Canada also began a public consultation in May 2023 that aims to assess how the digital dollar will fit into the Canadian economy. The move indicates that Canada is also considering launching a central bank digital currency as more and more countries step up their efforts in this area.