Brazil has become the latest nation to unveil plans for a central bank digital currency (CBDC), and may unveil the digital real in two years’ time – but the token’s would-be architects added an all-too-familiar, non-committal caveat.
Per an official release from the Banco Central do Brazil (BCB), the bank set up a “study group for the issuance of central bank digital currency” in “mid-August” this year.
Just like central banks across Europe and East Asia – particularly South Korea and Japan – the BCB has been careful with its wording, apparently wary of making an outright commitment to issuance.
Both the Bank of Korea and the Bank of Japan had been opposed to the idea of issuing CBDCs right up until the start of 2020, variously claiming that advanced economies had little need for a digital fiat. But both are now racing ahead with fast-paced pilot rollouts, while at the same time making claims that they are still undecided as to whether or not they will actually launch their tokens.
However, a number of events appear to have changed the minds of these banks, including the coronavirus pandemic, China’s fast-developing digital yuan project and Facebook’s Libra plans.
The BCB said that its new unit will be charged with “studying the digital currency issuance model to understand the phenomena and its potential impacts, particularly on as financial inclusion, economic growth, technological innovation and efficiency of financial transactions.”
The group will also look at “risk mapping – including cybersecurity, data protection and regulatory compliance issues – as well as an analysis of [a] CBDC’s impact on financial inclusion and stability and on the conduct of monetary and economic policies.”
The BCB’s governor, Roberto Campos Neto, used slightly more bullish language, however, suggesting at a media event that the token could roll out as early as 2022.
He stated, per media outlet Correio Braziliense,
“[We] need an instant payment system that is efficient and interoperable, an open system where you can create competition and a currency that has credibility, is convertible and is international. If all of that is in place, I think you have all the elements to launch a digital currency. We think we will have it ready in 2022.”
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