Brazil to Launch Its Digital Currency in 2024

Brazil to Launch Its Digital Currency in 2024

The Brazilian central bank is looking to launch its digital currency in 2024 following a closed pilot program next year in collaboration with financial institutions.

The Central Bank of Brazil will launch its digital currency in 2024 according to the bank’s president Roberto Campos Neto. Compos Neto spoke at an event hosted by the news website Poder 360, in which he said the project has garnered a lot of international attention. He added that the design of the central bank’s digital currency would encourage banks to tokenize their assets, with considerable efficiency gains according to reports by Reuters. He said:

If the digital currency is actually a tokenized deposit, it inherits all the regulation that already applies to deposits.

Campos Neto also added that the project should not disturb monetary policy or hurt banks’ balance sheets. According to the central bank’s president, representative of the International Monetary Fund (IMF) have approached the bank and has provided feedback indicating that this model seems the simplest to implement and that other central banks should consider looking into implementing the same model. He added:

In the end, we were even flattered to have thought of a system that other central banks are now thinking of.

The benefits of a digital currency should be to improve the banks’ settlement, auditing, and funding costs according to Campos Neto. He further predicted a jump in the use of the bank’s popular instant payment system, Pix, and this will be achieved when users can access cheaper credit through the system without a fee – a system known as the merchant discount rate (MDR) which merchants pay to companies that supply credit card machines. Pix was launched in November 2020 and is free for individuals, although the system lets banks and payment institutions freely define merchant’s costs for receiving and transferring funds.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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