Roberto Campos Neto, the Central Bank of Brazil’s President, recently made a statement about the Brazilian central bank digital currency (CBDC). He stated that rather than acting as a retail-focused public token, the Brazilian Real would operate more like a wholesale asset. Campos further disclosed that private banks in Brazil would also have the authority to issue their own stablecoins and digital real deposits will be used as collateral for issuing them. There are numerous other CBDCs that are also in development all over the world. One such example is the digital renminbi, which is also called Digital Currency Electronic Payment.
However, it is important to note that the Brazilian CBDC is not going to operate the same way as the rest of the CBDCs. The digital real will have a different design because it will be meant for use as a wholesale asset, rather than retail. The President of the Brazilian central bank disclosed this information in Rio at a crypto summit. He said that banks would have to develop a technology for issuing their stablecoins and making this investment would be good because it can offer them gains. He stated that once banks have developed the right technology, they would be able to issue stablecoins in pretty much the same way as other digital assets are monetized.
In addition, Campos Netostated that the focus of the digital real would be rather unique, as it will monetize the digital assets without inflicting any harm on private banks or their credit functions. This is because the digital real would be used as collateral. Tokenization was another area that Campos Neto mentioned that could be improved with the help of a CBDC. He talked about mortgages and stated that using a tokenization model could come in handy for paying a mortgage or even getting it reversed. Plus, it would also cut down the waiting times as well as the fees and would eliminate a great deal of the paperwork involved in the process.
Therefore, the Brazilian Blockchain Network was recently introduced in the country. The purpose of this project is to provide other institutions in Brazil with a common base that can be used for developing other projects. It is possible that the project might use a digital real and tokenized assets in the future in order to accomplish some of the goals mentioned earlier. However, Campos Neto also talked about other central banks and criticized the lack of coordination and disorder that had been seen in their process of developing their central bank digital currencies.
He stated that when he had met with some other central banks, they were all talking about using different systems. For instance, one of them discussed a multi-tiered payment system, while another focused on a decentralized system. He stated that this kind of development could never turn out to be a better solution than a centralized crypto platform. Some prominent banks like the ECB are currently working on developing CBDCs.