The Central Bank of Brazil Selects Visa, Santander for CBDC Pilot Phase 2
The Central Bank of Brazil (BCB) has made significant strides in its Central Bank Digital Currency (CBDC) pilot, known as Drex, by announcing the selection of 13 themes for the second phase. This phase will focus on testing financial services through smart contracts managed by third-party participants.
After receiving 42 use case proposals, the BCB, in collaboration with the Securities and Exchange Commission (CVM), carefully selected themes covering various financial services, including optimizing the foreign exchange market and automobile transactions.
Global heavyweights like Visa and Santander are set to play crucial roles in this phase, highlighting the pilot's increasing importance on both national and international levels.
Visa and Santander Amongst Other Key Participants and Projects
In this second phase of the Drex pilot, a diverse group of 16 consortia or companies will test and develop essential resources for the platform's operation. Notably, major players like Visa and Santander are actively participating in the pilot.
Visa, in partnership with XP and Nubank, will focus on optimizing the foreign exchange market to facilitate cross-border transactions using the CBDC infrastructure.
On the other hand, Santander will explore CBDCs' potential in automobile transactions and work on projects related to credit transactions and decarbonization, aligning with global sustainability goals.
The 13 selected themes have been divided between the BCB and the CVM, with the central bank overseeing 11 themes and the securities regulator supervising two. These themes cover a wide range of financial applications, from credit transactions to real estate and agribusiness asset transactions.
CBDC Brazil: Applications To Be Opened Again In Q3 2024
As the Drex pilot progresses into its second phase, the focus will be on refining the interaction between privacy solutions and the implementation of financial services via smart contracts. Each selected theme will operate within dedicated debate environments to collaboratively refine governance models and strategies for integrating these services into the broader financial system.
The BCB plans to open a new call for applications from entities interested in joining the Drex pilot in the third quarter of 2024. The central bank aims to broaden participation and test the full implementation of smart contracts by the end of the first half of 2025.
This strategic move demonstrates the BCB's commitment to fostering collaboration with industry players and regulatory bodies, paving the way for enhanced financial inclusion and operational efficiency in Brazil's financial system through digital currencies.
The successful outcomes of these tests are expected to set the stage for digital finance in Brazil and play a pivotal role in the country's digital transformation. Earlier this year, the central bank also unveiled plans to regulate crypto and virtual asset service providers, further signaling Brazil's embrace of digital innovation.
