Brazil Follows China´s Footsteps to Create Digital Currency

 

The Brazilian Central Bank (BC) has announced progress in the launch of the country´s digital currency, following the footsteps of China´s “e-yuan”.

Roberto Campos Neto, BC president, said the the monetary authority has been working on plans for the digital currency, since the creation of a working group in August last year to discuss the impacts, benefits and costs of the new model.

A detailed report, with alternatives for the implementation of virtual money by 2022, will be delivered to the BC Board, which will make the decision on whether to carry out the project.

The digital currency issued by the monetary authority would be part of the country’s monetary base – just a new way of representing money already in circulation – culminating the implementation of the instant payment system, Pix, and open banking.

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Experts point out that the growing digitalization of payments and China’s progress on the issue should cause other countries – including Brazil – to accelerate the implementation of their virtual currencies.

“I am sure that [the Chinese digital currency] will give impetus. With China taking the lead, everyone was provoked to think about the issue”, Eduardo Diniz, a professor at FGV (Fundação Getulio Vargas) and a researcher in the technology area, told the Brazilian press.

“There is a problem of supply and demand, since it is a project that requires investment. So the discussion is whether it would be accepted by the population”, Diniz adds, noting that the high usage of Pix is ​​an indication that the digital currency would be well accepted by Brazilian society.

“The pandemic accelerated this whole digitalization process and forced people to adapt. It is a process with no return, so this demand does not decrease, it only increases.”

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China has taken the lead in the use of digital money, and the government’s issuance of e-currency, called CBDC (Central Bank Digital Currency), is in the final stages of implementation.

Earlier this year, Beijing distributed virtual resources, downloaded via mobile phones, to the population so that people could test the new resource. If Brazil advances quickly on the project, it could be one of the pioneers.

 

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