Brazil has just unveiled its plans for their central bank digital currency (CBDC), and could launch the digital real in two years.
According to an official statement from the Banco Central do Brazil (BCB), the bank set up a “study group for the issuance of the central bank’s digital currency” in mid-August this year.
Like the central banks of Europe and East Asia, especially South Korea and Japan, the BCB has been cautious in its formulation, apparently concerned not to make too definitive commitments.
Both the Bank of Korea and the Bank of Japan were opposed to the idea of issuing CBDCs until early 2020, each claiming that healthy economies did not need digital currency. But both are now embarking on a frantic race, while saying that they do not yet know whether they will actually launch their CBDCs.
However, a number of events seem to have changed the banks’ minds, including the coronavirus pandemic, China’s burgeoning digital yuan project and Facebook’s plans for the Libra.
The Banco Central do Brazil said its new unit will be responsible for “studying the model of digital currency issuance to understand the phenomena and their potential impacts, especially on financial inclusion, economic growth, technological innovation and efficiency of financial transactions”.
The group will also look at “risk mapping – including cyber security, data protection and regulatory compliance issues – as well as analyzing the impact of a CBDC on financial inclusion and stability and on the conduct of monetary and economic policies”.
BCB Governor Roberto Campos Neto, however, used somewhat more optimistic language, suggesting at a media event that the national crypto could be launched as early as 2022.
He said, according to the media Correio Braziliense:
“We need an efficient and interoperable instant payment system, an open system where we can generate competition and a currency that is credible, convertible, and international. If all this is in place, I think we will have all the elements to launch a digital currency. We think it will be ready by 2022.”