In the foreground, as interest in central bank digital currencies (CBDC in English), Brazil does not want to be left behind. Therefore, the Central Bank of Brazil (BCB), has formed a team dedicated to studying the cryptocurrency industry.
It is important to emphasize that the approval of the team does not mean that the Central Bank of Brazil will issue a digital currency. Rather, that the monetary authority will study the issue and give society a response on the issue.
Due to this, in a statement on August 21, the Central Bank of Brazil announced that the objective is to study the digital currencies issued by central banks, the CBDC. In addition, to evaluate the benefits and impacts of the eventual issuance of the Real (national currency), in digital format.
Creation of the team to study CBDC
To this end, the decision of the central Brazilian entity to create a task force comes as a result of a recent growth in the digital payments sector.
About, Aristides Andrade Cavalcante Net, from the Information Technology Department of the Central Bank and coordinator of the group, explained:
«The number of electronic payments has been growing in recent years. Thanks in particular to the evolution of mobile devices and communication technology.
Likewise, the Central Bank of Brazil indicates that the new group will examine how much money could be saved by issuing the CBDC. It should be noted that the team consists of 12 members of an intergovernmental group.
Objectives of the Central Bank of Brazil group
Additionally, according to the statement: «Among the group’s objectives is the proposal of a model for the eventual issuance of the CBDC. Also, with identification of risks and the analysis of the impacts of the CBDC on inclusion and financial stability. Also, the conduct of monetary and economic policies«.
In the same sense, in the opinion of Arnaldo Francisco Vitaliano, from the Bank’s Department for the Promotion of Financial Citizenship: «Studying the digital currency issuance model is essential to understand the phenomenon and its possible impacts«.
Similarly, Rafael Sarres de Almeida, an official from the Information Technology Department of the Central Bank of Brazil, said:
“The issue of digital currencies addressed by central banks has been on the research agenda of many central banks for some time.”
Adding: «However, this year there was a greater focus on a more practical perception«.
Likewise, among the analyzes addressed in the study model, the evaluation of the complementary benefits that an electronic currency can bring to the instant payment system will be included «Pix«, Which will begin operations in November.
Benefits of a CBDC according to the Central Bank of Brazil
Certainly, the team highlighted that issuing a CBDC could provide different benefits. Among those that stands out, help the country to reduce the cost of issuing and maintaining cash notes and coins, which circulate in the economy.
For his part, the coordinator of the team pointed out that, in addition to reducing costs, a digital currency can promote one of the strategic objectives of the Central Bank of Brazil: «financial citizenship«.
‘An electronic currency can facilitate a more secure use of money than today. In addition, to create monetary policy tools.
To summarize, central banks are talking about digital currencies more than ever. Most importantly, many even like the idea of making their own CBDC. Would this be an option to improve financial stability? Leave us your opinion in the comment box.
Finally, I give you this phrase from Karl Marx: «Gold circulates because it has value, but paper money has value because it circulates«.