Binance has announced that it will be opening two new offices in Brazil, with the team behind the operation doubling in number.
The president of the Central Bank of Brazil, Roberto Campos Neto, has announced that a Brazilian Central Bank Digital Currency (CBDC) will be launched later this year. The CBDC will be part of the country’s national currency in the future, marking another country with the intention to officially look to introduce a digital currency to the nation’s economic ecosystem.
The confirmation of the news was announced during a Brazilian media event at the beginning of the week. During the announcement, Neto noted that the pilot programme of the CBDC investigation would likely be launched during the second half of the year. The Brazilian CBDC would be tied to the national fiat payment system, working at the same rate as the national currency, but operating similar to Bitcoin with a capped supply. According to Neto, the CBDC, referred to as the Digital Real, would have a certain amount that would be minted in order to digitise the national currency without upsetting the economy. He offered:
“[Using the Reserve Transfer System in Real Digital] is a way of creating the digitalization of the currency without creating a rupture in the banks’ balance sheets. This project should have some kind of pilot in the second half of the year.”
The news of a Brazilian CBDC pilot launch follows a month of the country’s central bank partnering up with nine banks across the country to assist and help develop the digital currency. As the infrastructure has been built, the country means to test out how it will be introduced to the country and what use-cases will emerge. Last year, Neto weighed in on the need to introduce digital finance in the country:
“The Real Digital initiative is a response to the rapid progress of digital transformation and society’s demand for native means of settlement in a new environment. We have made a long way since the creation of the working group on digital currencies in 2020 and with each step taken we mature the conditions so that important efficiency gains can be achieved.”
The confirmation from the Central Bank president places Brazil as one of countries of an increasingly expanding list looking to adopt cryptocurrency into their national tender. While it might not be quite as Bitcoin-bullish as El Salvador, the first country where Bitcoin is legally accepted tender in the country, Brazil has been looking to introduce cryptocurrency and digital assets to its legal framework this year. In February, after three years of working on it, Brazil introduced a cryptocurrency bill to put legislation in place to regulate the cryptocurrency market in the country.
Cryptocurrency, used as investment or for payments?
A wide-spread point of discussion in the industry is whether cryptocurrencies should be used as an alternative investment asset class, like a digital gold, or whether they should be treated as a means to make payments for retail and business transactions. According to Neto, the use of cryptocurrency is likely more prominent as an investment opportunity rather than a payment system in the economy. However, he added that this isn’t necessarily a fixed perspective and the wide function of the digital industry might shift as adoption increases among new investors and companies.