The central bank of Brazil has assembled a working group to explore the implementation of digital currencies. The group will also examine the implications of the eventual issue of the central bank’s digital currency (CBDC).
As stated by the institution, online payments have been developing over the past years, and the digital currency will allow residents of the country to completely switch to non-cash payments. In addition, digital real will help eliminate the costs associated with the issuance and maintenance of banknotes and coins. According to the Central Bank’s estimates, the cost of providing citizens with paper money is 90 billion reals (more than $16 billion) every year (or about 1-2% of the country’s GDP).
An inter-agency team of 12 experts will investigate the economic as well as social risks and benefits of issuing CBDC. Spokesman Rafael Almeida stressed:
“It’s important to highlight that the group’s potential approval does not necessarily mean that the Brazilian central bank will issue its own digital money.”
Almeida also said that the main result of the research of the working group should be “a response to the public on this topic.” Among other things, CBDC will be studied in the context of coexistence with the instant payment system Pix, which is due to launch before the end of the year.
