The possibility of launching a digital currency issued by the Central Bank (CBDC) Brazilian – the so-called digital real – is approaching, as the monetary authority pushes the development of the digital version of the Brazilian currency.
Currently, the development of the digital real by the proposals selected by the central bank is in the testing phase, which will last until January 2023.
Despite the progress that digital real can provide, there are still doubts about the possible impacts of the currency on the economy in Brazil and in private banks in the country.
To resolve these issues, the Crypto Times spoke with Marilyn Hahn, Chief Operating Officer (COO) of Bankly.
What to expect from the first tests
with Real Digital, according to the Central Bank
Positive or negative impacts?
One of the first topics related to the digital real refers to the impacts on the Brazilian economy. For Bankly’s director of operations, the implementation of a CBDC in the country will only have positive impacts.
However, the favorable outlook does not mean the absence of challenges. According to her, the digital real will definitely help solve economy use cases, “bringing more security, privacy and traceability to the ecosystem”.
However, Marilyn points out that, for this to happen, the market must be aware of issues related to privacy, security and greater disintermediation of banking services.
“It will be quite challenging for the players sectors – mainly financial institutions and fintechs – evolve in terms of processes, expertise and tools on these issues at the same speed as technology adoption,” adds Hahn.
Another important challenge mentioned by Bankly’s COO is related to the infrastructure of the national financial system – which includes the current scenario, but not the blockchain technology.
Adoption of the digital real
so that the digital real succeed in Brazilit is necessary for the population to adopt CBDC in their daily lives.
In this regard, Marilyn says that national and global e-commerce could have “a gigantic gain”, as CBDCs can drive the development of autonomous contracts (“smart contracts”, in English).
The second important point concerns the consumption of products and services across borders.
For her, the central banks that are evaluating the issuance of CBDCs believe that the digital version of their respective fiat currencies can “alleviate the main pain points in a greater opening of global consumption, such as the limited opening hours of payment systems and the duration of current transaction chains”.
How are private banks doing?
Another question that arises in relation to the digital real is related to the impacts on private banks and their role in the economy after the launch of the CBDC.
In this regard, Bankly’s director of operations points out that there will be no negative consequences of strong impact for private financial institutions. “Just as banks are currently obliged to provide money to account holders, the same will happen with the digital real”, he says.
“The launch of a CBDC is essential to guarantee the role of traditional banks in the economy to carry out the distribution of money in a reliable and safe way to the population”, he adds.
Emerging countries ahead
The fact that emerging countries such as China and Brazil, being at the forefront in the development of their respective CBDCs, surpassing the usual American and European leadership is something to be highlighted.
“I believe that the main motivation of emerging countries [para desenvolver uma CBDC] it is because the financial inclusion strategy is so much more urgent than in developed countries”, he says.
The COO also points out other factors that can contribute to a faster development of a digital currency. According to her, countries like Brazil and China “have high levels of corruption, and CBDCs mean a flow of money with unparalleled transparency”.
In the Brazilian case, acts of money laundering and fraud could be avoided with the launch of the digital real.
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