The President of the Central Bank of Brazil, Roberto Campos Neto, has once again emphasized that the country’s new digital currency, Drex, will help reduce costs in the national financial system.
Speaking at the XXXIII Lisbon Meeting, an event attended by central bank presidents of Portuguese-speaking countries, Campos Neto highlighted that Brazil already has a digital payment currency called PIX, which operates 24/7 with instant transactions.
Therefore, the main goal of Drex is not to act as a payment tool, but as a platform to enable tokenization in the country’s economy, thus reducing costs in the financial system.
“This generates modernization in terms of risks, asset management, funding, collateral management, so there is a very significant positive externality for banks to start doing this,” said Campos Neto.
Regarding Drex, Campos Neto also mentioned that Brazil will enable a tokenized economy without banks losing their autonomy and without replacing current actors in the financial system. This is why the Central Bank chose the wholesale CBDC model, unlike other countries that are developing retail CBDCs, such as China.
This choice has made Drex, according to Campos Neto, one of the most advanced CBDCs in the world. He stated, “The currency has a very different format from what I see out there because we understand that the main challenge of creating a digital currency was to avoid disintermediation of banks.”
Currently, Drex is undergoing testing in Brazil. The Central Bank recently announced that the tests will advance to a new stage in October, focusing on aspects of transaction and user privacy.
Clarissa Souza, a systems analyst at the Central Bank, stated that they are evaluating three solutions for implementation in Drex: Anonymous Zether from Consensys, which is projected to undergo tests at the end of October, Starlight from Ernst & Young (EY), and Parchain from Parfin. The latter two are still in the discussion phase for implementation.
It is worth noting that the Drex project in Brazil aims to revolutionize the financial system by embracing digital technologies, ensuring the participation of banks, and improving efficiency while preserving financial stability.