The chief central banker of Brazil, Roberto Campos Neto states that Brazil could be ready for a digital currency (CBDC) by 2022. According to Neto, Brazil will have an interoperable instant payments system.
CBDCs could be used to meet the demand of a fast-growing digital financial system in Brazil. The central bank of the nation is planning to roll out its PIX instant payment system and an Open Banking initiative later in the year.
Brazil’s government joins a growing number of governments with its new payment system with similar instant-payment benefits to Bitcoin. Brazilian Payment Scheme (PIX) facilitates transactions in 10 seconds or less through different devices.
The system promises to make the payment of taxes simpler and faster. The Brazilian government aims to make payments (income tax refunds, social benefits, grants, etc) through the system in the future.
“To have a digital currency, you need an instant payment system that is efficient and interoperable; an open system, where you can create competition; and a currency that has credibility, is convertible and international. After that, I think you have all the ingredients to have a digital currency. We think we will have this in 2022.”
Banco Central is also currently working on creating a working group to begin studying CBDC issuance. A final report is meant to be ready over a period of 6 to 12 months.
“A CBDC distinguishes itself from cryptocurrencies without national trust, like Bitcoin, because it is just a new form of representation of the currency already issued by the national monetary authority.”
The major difference between Bitcoin and government-issued digital currencies lies in the fact that government-issued digital currencies are usually based on centralized networks which could mean that users do not gain the benefits of a decentralized blockchain that users of Bitcoin would.