Thomas Daniels
The Central Bank of Brazil has officially opened the application process for its central bank digital currency (CBDC) pilot, Drex, from October 14 through November 29. This marks the second phase of Brazil’s ongoing efforts to develop its digital real.
Thirteen proposals, encompassing complex applications of the tokenized real, have already received approval. These applications include government-backed loans, agribusiness assets, public network assets, real estate, automobiles, carbon credits, and debentures.
A report from Valor indicates that the Drex Executive Management Committee will oversee the receipt of new applications, with the goal of expanding participation and incorporating more advanced use cases compared to the initial phase of the pilot.
In the first phase, 16 consortiums—primarily led by banks—tested the decentralized use of tokenized real, focusing on bank deposits and the exchange of federal government bonds. However, privacy concerns remain, as four participants are still working on scalable solutions to safeguard transaction anonymity between users.
Drex, Brazil’s CBDC, is designed to establish a robust tokenization infrastructure within the country’s financial system. João Pedro Nascimento, President of the Brazilian Securities and Exchange Commission, emphasized the enduring potential of tokenization, noting that it could improve the distribution of investment products if integrated into the blockchain in a regulatory-compliant manner.
Brazil’s CBDC initiative aligns with a global trend, with 134 countries exploring CBDCs, according to the Atlantic Council. Brazil ranks among the 65 nations that have progressed to advanced stages of development. Globally, China leads the way with its digital renminbi (e-CNY), which, as of October 11, has seen 180 million personal wallets opened and transactions totaling ¥7.3 trillion yuan ($1.02 trillion).
