Brazil has now entered the race of developing a central bank digital currency (CBDC) as its monetary regulator is aiming to develop one by 2022, the president of the Central Bank of Brazil, Roberto Campos Neto revealed.

This came weeks after the central bank established a group to study the prospects of launching a CBDC.

Neto highlighted the role of PIX, the upcoming banking infrastructure in the country for instant payments, in the development of the digital currency. Brazil is already working on the  Settlement  Settlement Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 business days or T+2 after the trade is executed, and for listed options and government securities it is usually 1 day after the execution. Conversely in Europe, settlement date has also been adopted as 2 business days settlement cycles T+2.Settlement ExplainedA settlement is also the process of the payment of an outstanding account balance, an open invoice or charge. The electronic settlement system is a relatively new construct that has only become a standard in the past thirty years.For example, in real estate finance, you have settlement when the funds are accepted, and the deed to the property is traders to the new owner. Settlement can also mean an adjustment or agreement reached in matters of finance or business. For example, we have settled with the bank or the credit card company. A number of risks arise for the parties during the settlement process. These are effectively managed by the process of clearing, which follows trading and precedes settlement. By extension, clearing involves modifying those contractual obligations so as to facilitate settlement, often by netting and novation. Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 business days or T+2 after the trade is executed, and for listed options and government securities it is usually 1 day after the execution. Conversely in Europe, settlement date has also been adopted as 2 business days settlement cycles T+2.Settlement ExplainedA settlement is also the process of the payment of an outstanding account balance, an open invoice or charge. The electronic settlement system is a relatively new construct that has only become a standard in the past thirty years.For example, in real estate finance, you have settlement when the funds are accepted, and the deed to the property is traders to the new owner. Settlement can also mean an adjustment or agreement reached in matters of finance or business. For example, we have settled with the bank or the credit card company. A number of risks arise for the parties during the settlement process. These are effectively managed by the process of clearing, which follows trading and precedes settlement. By extension, clearing involves modifying those contractual obligations so as to facilitate settlement, often by netting and novation. Read this Term infrastructure and is aiming to launch it by November.

The Brazilian central bank is also launching an Open Baking initiative later this year.

“To have a digital currency, you need an instant payment system that is efficient and interoperable; an open system, where you can create competition; and a currency that has credibility, is convertible and international. This payment system could be the renowned PIX that is about to be launched,” Neto said at a Bloomberg event on Wednesday, covered by local media Correio Brazilienese.

PIX can be seen as a competition to  Ripple  Ripple Ripple was co-founded by Jed McCaleb and Chris Larsen and was debuted in 2012 as both a digital disbursement network and a pre-mined digital coin denoted as XRP. Possessing less market cap than both Bitcoin and Ethereum, Ripple ranks as the third-largest cryptocurrency.Its dual open-source and peer-to-peer (P2P) decentralized platform whose network is capable of working with any form of money such as GBP, Ethereum, Yen, etc. What is Ripple Used For? Known as a gateway, participants of Ripple may send and receive currencies to public digital address codes through the Ripple network. You can think of a gateway as a payment intermediary for Ripple. Serving as a bridge currency, XRP allows for a seamless exchange of any currency (fiat or cryptocurrency) due to each currency possessing its own gateways such as BitPay, CoinsBank, Blockonomics, and CoinGate. Unlike Bitcoin, the Ripple network does not support proof-of-work (PoW) or proof-of-stake (PoS) systems. Instead, a consensus protocol is employed to authenticate and verify that each transaction and account balance match.This ensures the integrity of the Ripple network while lessening the risk of double-spending, all while these confirmations take no longer than 4 seconds to complete.Ripple’s IOU gateway is similar to the traditional banking systems, where contractual obligations are upheld while the potential of transactions defaulting is a constant variable with counter-party risk. Coincidentally, banks are said to be increasing their usage of the Ripple payment system while its market cap shows evidence of its value and demand. All transactions performed over the Ripple network are logged and may be seen on the Ripple consensus ledger. For trading, XRP is generally traded in the form of CFDs. Ripple was co-founded by Jed McCaleb and Chris Larsen and was debuted in 2012 as both a digital disbursement network and a pre-mined digital coin denoted as XRP. Possessing less market cap than both Bitcoin and Ethereum, Ripple ranks as the third-largest cryptocurrency.Its dual open-source and peer-to-peer (P2P) decentralized platform whose network is capable of working with any form of money such as GBP, Ethereum, Yen, etc. What is Ripple Used For? Known as a gateway, participants of Ripple may send and receive currencies to public digital address codes through the Ripple network. You can think of a gateway as a payment intermediary for Ripple. Serving as a bridge currency, XRP allows for a seamless exchange of any currency (fiat or cryptocurrency) due to each currency possessing its own gateways such as BitPay, CoinsBank, Blockonomics, and CoinGate. Unlike Bitcoin, the Ripple network does not support proof-of-work (PoW) or proof-of-stake (PoS) systems. Instead, a consensus protocol is employed to authenticate and verify that each transaction and account balance match.This ensures the integrity of the Ripple network while lessening the risk of double-spending, all while these confirmations take no longer than 4 seconds to complete.Ripple’s IOU gateway is similar to the traditional banking systems, where contractual obligations are upheld while the potential of transactions defaulting is a constant variable with counter-party risk. Coincidentally, banks are said to be increasing their usage of the Ripple payment system while its market cap shows evidence of its value and demand. All transactions performed over the Ripple network are logged and may be seen on the Ripple consensus ledger. For trading, XRP is generally traded in the form of CFDs. Read this Term’s ODL platform, and the involvement of the central bank in its development will also give it an edge over the US-based private player. Notably, Ripple is aggressively trying to capture the Brazilian market with local bank partnerships.

Race of Central Banks?

While the Brazilian central bank is taking positive steps towards the development of a digital currency, it is still far behind some of the other global counterparts. China is leading the arena and recently expanded its CBDC pitot program to major regions including Beijing and the Greater Bay Area.

One of the Chinese banks recently soft-launched the wallet for digital yuan for its customers but disabled the feature quickly without any explanation.