According to the Central Bank of Brazil, the real digital pilot project will use an authorized and Ethereum-compatible blockchain for the issuance of the tokenized version of the country’s currency. Hyperledger Besu, the open source platform chosen for testing, will allow the project to run without any license costs and take over maintenance costs later, if the platform is ultimately chosen.
Tokenized digital real pilot to use Ethereum-compatible Hyperledger Besu
Brazil continues to move forward with its plan to deliver a working version of its own central bank digital currency (CBDC), the digital real, by the end of 2024. According to reportsthe country’s central bank chose Hyperledger Besu, an Ethereum-compatible open source block chain platform, as the foundation on which to run the tokenized version of the digital real.
Local analysts believe that compatibility with Ethereum could bring a large number of third parties to develop applications and services using the tokenized digital real, opening the economic playing field to more competition. However, this could also minimize the role of banks in the new digital economy. On this, JC Bombardelli, CTO of educational technology startup Gama Academy, stated:
I don’t think it’s a total nod to the defi world because that would mean giving up a lot of controls that the central bank would never want to have.
Another reason to choose Hyperledger Besu would be its open source origin, which would allow the government to use it without having to pay licenses.
two-tier structure
The tests, which are scheduled to begin this month, will only include the tokenized version of the digital real, intended to be used in various transactions and issued by private banks with deposits as collateral.
The final structure of the digital real will include a two-tier system, in which the real currency will only be managed by authorized institutions. In this regard, Fabio Araujo, coordinator of real digital projects of the Central Bank of Brazil, stated:
The regulatory framework will be the current one to avoid asymmetries in relation to what exists today. The digital real will serve more for interbank transactions and the tokenized real will be a kind of stable currency issued by banks.
The digital royal structure allows banks to maintain their functions in the system and addresses a number of privacy and compliance concerns. However, other CBDCs, such as the Chinese digital yuan, deliver the actual currency to their users and can be used directly to make and receive payments through a digital wallet.
What do you think of the decision to use Hyperledger Besu, a system compatible with Ethereum, for the issuance of the digital real? Tell us in the comment section below.
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