Digital Real Pilot to continue Ethereum Compatible Blockchain Permitted – Finance
According to the Central Bank of Brazil, the digital real pilot will use one Ethereum-compatible, approved Blockchain for issuing the tokenized version of the national currency. Hyperledger Besu, the open-source platform chosen for the tests, will allow the project to run without license costs and to cope with the maintenance costs later when the platform is definitely chosen.
Tokenized Digital Real Pilot to use Ethereum Compatible Hyperledger Besu
Brazil is moving forward with its plan to have a working version of its own central bank digital currency (CBDC), the digital real, by the end of 2024. The country’s central bank reportedly chose Hyperledger Besu, an open-source, Ethereum-compatible blockchain platform, as the base on which to run the tokenized version of digital reality.
Local analysts believe Ethereum compatibility could push a number of third parties to develop applications and services using the tokenized digital real, opening the economic playing field for more competition. However, this could also minimize the role of banks in the new digital economy. JC Bombardelli, CTO of ed tech startup Gama Academy, explained:
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 never wants to have.
Another reason to choose Hyperledger Besu would be its open-source origins, which would allow the government to use it without having to pay for licenses.
Two tier structure
The tests, due to start this month, will only involve the tokenized version of the digital reality, intended for various transactions and issued by private banks with deposits as collateral.
The final structure of the digital real will involve a two-tier system in which the real currency will only be managed by authorized institutions. Fabio Araujo, Coordinator of Digital Real Projects at the Central Bank of Brazil, said:
The regulatory framework will be the current one to avoid asymmetries compared to what exists today. The digital real will serve more for interbank transactions, and the tokenized real will become a type of bank issued stablecoin be.
The digital real structure allows banks to keep their functions in the system and answers a number of privacy and compliance concerns. However, other CBDCs like the Chinese digital yuan deliver actual currency to their users and can be used directly to make and receive payments through a digital wallet.
What are your thoughts on the decision to issue Hyperledger Besu, an Ethereum-compatible system, for the digital real? Tell us in the comment section below.
photo credit: Shutterstock, Pixabay, WikiCommons
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Source: Crypto News Deutsch
