Brazil central bank launching CBDC in 2024

The central bank of Brazil, through its president, Roberto Campos Neto on Tuesday revealed that they will launch a central bank-backed digital currency (CBDC) by 2024. Accordingly, they will launch a pilot program in partnership with other major banks in the country next year.

While speaking at an event, the president hinted that the sole aim of the CBDC launch is to encourage massive asset tokenisation and efficiency in cash-related services. 

He added that if digital currencies are seen as a tokenized store of value, they should automatically inherit all existing deposit regulations and not become a threat to banks’ balance sheets and monetary policies. 

Brazil’s planning and justification for the CBDC launch

Nato describes the move as that which, when implemented, will drive rapid financial inclusion. Brazil is happy to join countries like Nigeria, Eastern Caribbean, Jamaica, Bahamas, and over 70 other countries towing the same path to financial inclusion through the tokenisation of assets. 

The president also believes that launching CBDC will lower the cash cost and ensure better risk management, better intermediation, and the complete tokenisation of not just assets but also contracts. 

The bank chief also hinted that it’s working with a representative of the international monetary fund (IMF) to ensure that its brand of CBDC becomes suitable for the economy of Brazil. 

Will it change Brazil’s disposition toward Cryptocurrency?

Earlier, through its chamber of deputies in Brazil, a bill was passed legalizing the use of crypto. The legislative decree requires the signature of the country’s siting president to become law.

However, the bill did not expressly intend to make crypto legal tender but rather an asset to be captured as a payment option under the central bank’s supervision, while specific tokens seen as securities will be under the control of the Brazilian securities and Exchange commission.