Fabio Araujo, representative of the Central Bank of Brazil, spoke about the possible development of Digital Reality in a public hearing before the Committee on Science, Technology, Innovation, Communication and Information Technology of the Brazilian Senate. Araujo explained that Digital Reality is still in the debate stage, and they are determining the requirement for such an instrument.
Central Bank of Brazil Still Debates Digital Reality
The Central Bank of Brazil is still there student the creation of Digital Reality, according to declarations given by Fabio Araujo, representative of the institution. Araujo stated in a recent public hearing with the Senate Committee on Science, Technology, Innovation, Communication and Information Technology that the bank is still discussing the need the society might have for a digital currency of a central bank (CBDC). Araujo stated:
Our goal is to explain what society requires to present to Real Digital. After that, we will soon move on to the test phase with proof of concept and possibly an innovative lab, and this will happen through 2022.
Araujo also revealed that the Central Bank of Brazil still has meetings with different parties that could help project the Digital Reality project. Senator Cunha, the senator who proposed the meeting, stated that the use of digital currencies there was a need for discussion due to the lack of information on the topic. He emphasized:
We need to debate this issue. Digitization is a reality in the life of the population, in various fields, but there is still no clearer information on how this will happen in relation to the money in circulation in Brazil.
Central Bank Digital Currencies versus Cryptocurrency
However, this opening up to Digital Reality, a central bank’s digital currency, does not translate into de facto approval of cryptocurrencies like bitcoin and ethereum. In fact, the position taken by the Central Bank of Brazil is negative. Araujo explained:
CBDK should not be confused with cryptocurrencies. The Central Bank of Brazil believes that cryptocurrencies are speculative assets and bring high risk to individual portfolios.
While the Central Bank of Brazil is still in the research phase of a hypothetical Digital Reality, it has published general guidelines that such a currency should follow in May, showing that there is real interest in the subject. This puts Brazil at the forefront of a digital currency survey by a central bank in Latam, a region where central banks seem not to be too interested in the issue yet.
What do you think about Brazil’s research on Digital Reality? Tell us in the comments section below.
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