Digital Real Will Be Used by Banks in Brazil as Collateral to Issue Their Own Stablecoins – According to statements from the president of the Central Bank of Brazil, Roberto Campos Neto, the digital real, the Brazilian central bank’s digital currency (CBDC), will be more of a wholesale asset than a public retail-focused token.
Private banks in the country will be able to create their own stablecoins that would be collateralized with digital real deposits, according to Campos Neto.
Brazil intends to issue a CBDC with a distinct design from other CBDCs such as the digital renminbi, also known as Digital Currency Electronic Payment. The Brazilian CBDC, the digital real, will be utilized for wholesale purposes only and will not be used for retail. At a crypto summit in Rio, Roberto Campos Neto, president of the Central Bank of Brazil, revealed this information.
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Campos Neto stated the following about the digital real’s potential application:
“Banks would be able to issue stablecoins on their deposits and will develop the necessary technology; nevertheless, they will be required to invest in order to benefit. After that, the protocols for releasing stablecoins on deposits will be essentially the same as those for monetizing various other digital assets.”
Furthermore, according to Campos Neto, the digital real will have a very specific focus, with the goal of monetizing assets without jeopardizing private banks’ credit functions by using it as collateral.
Tokenization was also mentioned by Campos Neto as a possible procedure by which a CBDC may improve the situation. The use of a tokenization model, according to Campos Neto, might make paying or receiving a reverse mortgage easier, reducing fees and waiting periods, as well as simplifying the paperwork involved in the process.
In this regard, Brazil has launched the Brazilian Blockchain Network, an initiative that aims to create a shared platform on which other institutions can build their projects. To fulfill the aforementioned goals, this project may leverage tokenized assets and the digital real in the future.
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To sum up, Campos Neto criticized central banks for the disorder and lack of coordination they had experienced while developing their respective CBDCs. He explained:
“When I meet with other central banks, I notice that one is working on a decentralized system, while another is discussing how to automate a multi-tiered payment system. It will never be better than a centralized crypto platform if development is done in this disorganized manner.”
