Brazil's digital currency implementation pushed to 2024
According to the country's Central Bank, the project to introduce a digital currency in Brazil has had its introduction delayed its introduction.
According to the new plans around the Digital Real project, the tests that were supposed to commence later this year have been pushed to 2023. This is due to a workers' strike at the Central Bank, which impacted the original schedule.
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During an event about the topic promoted by the Brazilian Banking Federation (Febraban) on Monday (30), the bank's representatives said the intention was to start the pilots towards year-end, but the timescales were significantly delayed. However, the plan is to run the tests in 2023 and up until the second half of 2024.
In April, the president of the Brazilian Central Bank, Roberto Campos Neto, said the Real Digital project would kick off towards the end of 2022. However, he noted at the time that there was a possibility the project would suffer a "slight delay" due to the strike at the institution, even though work around the implementation was already underway.
The rules were preceded by a study, which analyzed the positive impact, as well as the risks involved in having a digital real, such as data protection and cyber security, as well as regulatory issues.
As an extension of the physical currency, the distribution of the digital real will be intermediated by custodians of the National Financial System and the Brazilian Payments System, with no remuneration to these institutions.
According to the banking authority, the set of guidelines places emphasis on the possibility of developing new market offerings based on innovations such as smart contracts, internet of things (IoT), and programmable money. The digital real may also be used in retail payments and will enable users to carry out online operations and possibly make payments offline.
The technological design of the digital real should allow for "full compliance with international recommendations and legal norms on the prevention of money laundering, financing of terrorism, and financing of the proliferation of weapons of mass destruction," as well as "compliance with court orders to track illicit operations."
The guidelines also state that the digital real should allow for interoperability and integration with a view to enabling cross-border payments. When it comes to cybersecurity, resilience and cybersecurity standards should be equivalent to the arrangements applicable to critical financial market infrastructure.