Tuesday, June 22, 2021

Central Bank of Brazil issues guidelines for its CBDC.

The Takeaway:

The Central Bank Of Brazil has released a note listing the general guidelines for the design of a hypothetical central bank-backed digital currency.

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The Central Bank of Brazil, the highest monetary authority of the South American country, has released a document specifying the general guidelines of a future Brazilian central bank digital currency (CBDC). The note, titled “Banco Central do Brasil releases general guideline for a Brazilian CBDC,” details the characteristics and traits that a hypothetical CBDC emitted by the institution will have in the future. The document recognizes there have been discussions about a CBDC possibility in the institution.

 

The document describes CBDC’s compliance with AML and anti-terrorism regulations.

Among other characteristics detailed in the document, apart from mentioning its use as a money substitute, its compliance with AML and anti-terrorism regulations are also highlighted. The central bank’s document cites that the CBDC will adhere to all privacy and security principles and rules determined, particularly by the Bank Secrecy Law and by the General Law for the Protection of Personal Data (LGPD). CBDC’s have been criticized for the lack of privacy and personal data of their users, so the bank is already dealing with this kind of criticism early.

 

The Central Bank of Brazil is also exploring other innovations. 

The central bank’s document on the CBDC also states the currency will have an emphasis on the development of innovative business models based on technological advances, such as smart contracts, the internet of things (IoT), and programmable money. This may enable the future currency to be interoperable with smart money features. The Central Bank of Brazil has been one of the pioneers in issuing the guidelines for its CBDC in the continent. Most of the countries in the region have made no announcements of having an interest in investigating this kind of currency to deploy it in their territories. Central banks across countries are working on CBDCs, including the US, Sweden and China

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Disclaimer: The article reflects the opinions of the author and is not representative of Chaintimes’ views.
The article does not offer any investment advice. User discretion is advised when investing in or trading with cryptocurrency. Extensive and diligent research should be carried out by the reader before making a decision.

Jai Pratap
Jai Pratap
A Mass Media Graduate who loves to write. Jai is also a sports enthusiast and a big movie buff. He loves to learn new things.

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