The Central Bank of Brazil – Banco Central do Brazil has begun groundwork on a Central Bank Digital Currency (CBDC) as revealed in an official announcement inaugurating a dedicated group set to study the crypto industry.
According to the notice, the Central Bank has selected a team of 12 members to study the feasibility of a CBDC in the country’s national payments system, and the impact of such move on the economy.
“The objective is to study digital currencies issued by central banks (central bank digital currency – CBDC) and evaluate the benefits and impacts of the eventual issuance of the Real in digital format…In order to anticipate the future of financial relations, the Central Bank decided to create a working group to discuss the impacts of an eventual issuance of digital currency in Brazil.”
A key factor leading to the consideration of a digital currency by the bank, is the possibility of saving a large part of the $16 billion (about 2% of its GDP) spent on running a functional supply of the country’s paper money every year.
The Central Bank seeks to know how much money will be saved if it reverts to issuing a digital form of currency.
Speaking on Brazil’s CBDC plans, Rafael Sarres de Almeida an official at the Central Bank IT Department remarked:
“The subject of digital currencies addressed by central banks has been on the research agenda of many central banks for some time. However, this year, there was a greater focus on a more practical approach.”
Almeida added that Asian power – China is nearing final testing phase of its Digital Yuan currency; just as many other national central banks have announced new CBDC projects.
In all, the cryptocurrency craze seems to have started taking a firm grasp in Brazil and all of South America, as online payments continue to grow sharply in the region over the course of the last several years.
The economic crisis in Argentina and Venezuela has also led to an increasing usage of cryptocurrency in both countries, as indicated by their rising Bitcoin trading volume.
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