Roberto Campos Neto, the President of the Central Bank of Brazil, shared the plans regarding a central bank digital currency (CBDC). He suggested the year 2022 as a possible starting point.
The Banco Central do Brasil is not the only central bank currently looking into digital currencies. At the moment, 80% of central banks worldwide research possibilities to implement their own CBDCs, and 40% have already started pilot projects, whose aim is to further investigate a central bank digital currency.
An excellent example of this is the Chinese government, who wants to issue its digital Yuan before the Olympic Games 2022. Thailand has already completed test runs for big enterprises using CBDCs for their payments.
Why a central bank digital currency?
The President of the Central Bank of Brazil shared the plans regarding a CBDC in a Bloomberg interview. He describes CBDCs as a "reliable, convertible, and international currency." In his opinion the introduction of a central bank digital currency is a logical consequence of the developments over the last years and the next step of modernization.
“A central bank digital currency differs fundamentally from cryptocurrencies like bitcoin, as it is actually a digital representation of the existing national currency.” - Roberto Campos Neto, President of the Central Bank of Brazil
When Roberto Campos Neto entered his current position in 2019, he arranged the introduction of the BC# Agenda, which is supposed to promote financial democratization in Brazil.
Banco Central do Brasil wants to stabilize and renew the state's financial system with the help of this agenda. The program further develops the BC+ Agenda and should improve the following things:
Among other things, access to the financial system will be facilitated so private people can become more active in the credit market. With the introduction of this program, the whole financial system should generally be more straightforward, and a lot government interventions could become redundant.
No specific release date yet
Together with the planned PIX-Transaction System (Brazilian Instant Payment Scheme), which should go online in November this year, Brazil will prepare for the introduction of the central bank digital currency. The exact starting point is still unknown. Roberto Campos Neto however, is sure that the Brazilian central bank will be ready in 2022. Now it is up to the politicians: They must pave the way for it.
Banco Central has already started with the necessary clarifications and plans. According to Neto, in approximately one year, they will release the results of their research on the effects and the potential of a CBDC.
You can read more about general CBDC developments and plans around the globe here.