The Central Bank of Brazil is accepting proposal applications from companies interested in participating in the nation’s central bank digital currency (CBDC) pilot, Drex, from October 14 until November 29.

Brazil’s Central Bank Approves Complex Applications for Tokenized Real

The Central Bank of Brazil has already approved 13 cases featuring complex applications for the tokenized real. These applications include government-backed loans, agribusiness assets, public network assets, automobile negotiations, carbon credits, debentures, and real estate.

Application Period for Digital Real Token

The Drex pilot’s Executive Management Committee will be receiving applications for the use of the digital real token from October 14 to November 29. This marks the second phase of the central bank digital currency pilot project, Drex. The Central Bank aims to expand the number of participants and receive more complex use cases compared to the first phase.

First Phase of Drex Pilot Project

In the first phase, 16 consortiums, primarily led by banks, registered to use real in a decentralized digital network through bank deposits and the exchange of federal government bonds in the “tokenized” version.

Privacy Solutions in Focus

The Central Bank emphasized that applicants should continue to test their privacy solutions. Notably, four entrants are still unable to address the issue of “hiding” transactions between participants in a scalable manner.

Understanding Drex

Drex is a digital currency created by the Brazil Central Bank aimed at establishing a “tokenization” infrastructure within the Brazilian financial system.

Regarding the use of digital currency in Brazil, the President of the Brazilian Securities and Exchange Commission, João Pedro Nascimento, stated that tokenization is a business model that is “here to stay” and the crypto industry must be brought into the financial system in a way that is “regulatory-compliant”.

Nascimento further added that integrating traditional financial assets into the blockchain will pave the way for improved distribution of investment products.

Global Trend in CBDC Development

Brazil’s efforts to develop its CBDC follow a global trend. As many as 134 countries are considering CBDC, with Brazil being one of the 65 countries already in the advanced stages of development.

As of October 11, China’s own CBDC, the digital renminbi (e-CNY), has registered 180 million personal wallets and a total transaction volume of ¥7.3 trillion yuan (approximately $1.02 trillion).

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