Brazil will have its own CBDC, reveals the Minister of Finance

Paulo Guedes announces that the Brazilian real will have a digital counterpart, underlining the central bank’s autonomy

Brazilian Finance Minister Paulo Guedes announced that Brazil will issue a Central Bank Digital Currency, or CBDC.

Guedes made the statement Thursday during a ceremony to celebrate the 100 million digital savings accounts opened on Caixa Econômica Federal:

„Now that the central bank is independent again, it is also strong on the digital front: Pix, OpenBank, fintech and digital assets. Brazil will have its own digital currency, so we are ahead of many countries“.

This is the first time that the minister has spoken directly on the subject, although he has not provided any further details on the CBDC project carried out by the central bank.

The Brazilian real will have a digital version

In August, the Brazilian central bank announced the formation of a study group for the potential issuance of a digital real.

Afterwards, the organisation’s president Roberto Campos Neto explained that Brazil needs an „improvement“ in its currency and that this will happen with the contribution of Pix, a new digital payment system at federal level:

„In our case, Pix is very important because from now on we see the union of an instant, accessible and interoperable form of payment with an open data system. In the future they will come together with a currency that has yet to be perfected“.

Moreover, although the central bank has not yet revealed how the digital version of the real will actually work on Bitcoin Aussie System, Campos Neto has already stated that it will enter into circulation from 2022.

Despite the lack of details on the Brazilian CBDC, the minister is announcing several new developments in the field of digitisation and national economic modernisation.

Guedes has already stated his intention to organise an initial public offering (IPO) for the new digital bank of Caixa Econômica Federal, as well as reporting that Brazil is about to join the Organisation for Economic Cooperation and Development (OECD).

The announcement of a CBDC comes at a particular time for the digitisation of the Brazilian economy. On Monday, the central bank’s instant digital payment system, Pix, recorded its first transactions, and its launch is scheduled for 15 November.

The functions of the CBDC
According to the central bank, the digital real will be used primarily for foreign exchange transactions, both domestically and internationally.