The Brazilian Central Bank has recently announced its selection of firms for its central bank digital currency (CBDC) pilot project. Interestingly, the list includes Nubank, a rapidly growing and crypto-friendly neobank that has achieved the coveted unicorn status. The bank aims to evaluate the benefits of a digital real using a specially developed platform.
Nubank is no stranger to the world of cryptocurrencies, having added a range of crypto-related functions to its apps in the past few years and even launching its own crypto asset. Initially, the Central Bank appeared to exclude crypto firms from the pilot, but several players from the sector have now been allowed to participate. This indicates a shift in attitude and possibly a recognition of the importance of incorporating crypto-related businesses in the development of a CBDC.
Joining Nubank will be companies like Itaú, a large traditional financial services provider with its own crypto interests. Itaú launched crypto custody services in late last year. The inclusion of smaller crypto-only firms in the pilot demonstrates the Central Bank’s willingness to engage with all industry players, regardless of their size. This is evident by the selection of domestic crypto exchange Foxbit, which is included as part of a consortium alongside investment provider Banco Arbi and neobank Pinbank.
Another member of the same consortium is nTokens, a company that specializes in blockchain and stablecoin solutions. The pilot also attracts the participation of big-name firms, such as Microsoft, Visa, and Santander, along with domestic banking giants like BTG Bank.
The Central Bank’s platform reportedly utilizes blockchain technology and Distributed Ledger Technology (DLT) for operating with tokenized assets. While still in the simulation phase, the pilot will not involve real-world testing or transactions involving real values. Instead, it seeks to determine if its coin can enhance efficiency, transparency, and security in financial operations.
Previously, the bank claimed that its CBDC would be designed to help foster growth in domestic businesses. This collaborative approach with various crypto and non-crypto firms indicates that the Brazilian Central Bank is serious about exploring the potential benefits and efficiencies that a CBDC could offer, without completely neglecting the contributions of crypto-related companies.
As Brazil and other countries continue to venture into the world of CBDCs, it’s crucial that they maintain a balanced perspective that considers the potential advantages of cryptocurrency involvement. While there are apprehensions about the blending of traditional banking with the world of digital assets, this pilot project demonstrates a growing interest in bridging that gap – and represents a potential game-changer for the global financial landscape.