Brazil’s ambition to have its own Central Bank Digital Currency hit a snag as the timeline for the realization of the project has been pushed back by the nation’s top financial institution.
Banco Central do Brasil (BCB), the central bank of Brazil, notified the public that it is now pushing for more time to roll out its CBDC, citing uncertainty within its financial infrastructure and the international landscape as the main reasons.
It can be recalled that back in May, the BCB released a document that revealed the general guidelines and characteristics of the country’s soon-to-come virtual currency, the digital Real. The bank’s Chief Central Banker, Roberto Campos Neto, said last year Brazil would likely be ready for its own CBDC by 2022.
Introducing the PIX
BCB launched a new payment system called PIX, aimed at addressing the increasing digitalization of Brazil’s economy and the lacking availability of payment methods.
To further bolster the country’s financial systems, the central bank is also expected to launch its open banking model, although the final timeline is not yet revealed.
Meanwhile, the introduction of a Central Bank Digital Currency can provide new tools to give way for innovation and competition in a digital economy, reduce cash usage and its maintenance cost, providing ample support for Brazil’s financial structure.
Much to accomplish first before having CBDC
However, for the country to have a workable CBDC, the central bank’s current projects must become successful.
Back in 2019, Institutio Locomotiva conducted research that revealed one-third of Brazil’s population, about 45 million people, has no bank accounts.
This gap in the nation’s financial system will make a rollout of a digital Real likely to be useless, hence the decision to push back the timeline of the project’s implementation to 2024.
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