Implementation of digital currency in Brazil pushed back to 2024

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According to the country’s Central Bank, the project to introduce a digital currency in Brazil has seen its introduction delayed.

According to the new plans around the Digital Real project, the tests which were supposed to start later this year have been pushed back to 2023. This is due to a strike by workers at the Central Bank, which has impacted the initial schedule.

At an event on the subject promoted by the Brazilian Banking Federation (Febraban) on Monday (30), representatives of the bank said that the intention was to launch the pilots towards the end of the year, but the deadlines have been significantly delayed. However, the plan is to run the tests in 2023 and until the second half of 2024.

In April, Brazil’s Central Bank President Roberto Campos Neto said the Real Digital project would kick off around the end of 2022. delay”. due to the strike at the establishment, even though the work around the implementation was already underway.

The rules were preceded by a study, which analyzed the positive impact, as well as the risks associated with the presence of a digital real, such as data protection and cybersecurity, as well as regulatory issues.

As an extension of the physical currency, the distribution of the digital real will be carried out by the depositories of the national financial system and the Brazilian payment system, without remuneration for these institutions.

According to the banking authority, the set of guidelines emphasizes the possibility of developing new market offerings based on innovations such as smart contracts, the Internet of Things (IoT) and programmable currency. Digital real will also be able to be used in retail payments and will allow users to transact online and possibly make payments offline.

The technological design of digital reality should allow “full compliance with international recommendations and legal standards relating to the prevention of money laundering, terrorist financing and the financing of the proliferation of weapons of mass destruction”, as well as “the compliance with court orders to track down illicit transactions.

The guidelines also state that the digital real should enable interoperability and integration to enable cross-border payments. In terms of cybersecurity, resilience and cybersecurity standards should be equivalent to the provisions applicable to critical financial market infrastructures.

Sylvia B. Polson