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 infrastructure and is aiming to launch it by November.
The Brazilian central bank is also launching an Open Baking initiative later this year.
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“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’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.