Brazil’s apex bank launches CBDC-linked test

The pilot test phase of Brazil’s digital real project is approaching, as the Central Bank of Brazil accelerates its efforts to create a digital currency. The bank has announced that it will be conducting a series of operational tests to evaluate the proposed architecture for the system.

The digital real project’s coordinator, Fabio Araujo, has said that security and privacy are two of the most important aspects to be tested. The pilot will examine the degree of security and privacy that the system can bring to the transaction information leakage derived from the system.

The new set of pilot tests is expected to take place after the current laboratory phase of the digital real, which is being conducted as part of the LIFT challenge. This open project, which brings together various organizations, has attracted nine proposals that aim to include the digital real as part of economic endeavors.

The final project reports for LIFT are due on April 25. However, the pilot will be limited in scope, shown in a simplified operational environment, and will only feature the introduction of another yet unselected tokenized asset for transactions.

The test will also allow the Brazilian Securities Commission and the Central Bank of Brazil to explore how third parties, including banks, could interact with the system. Banks will be able to issue their own tokens backed by the digital real.

This expanded test environment will be open to institutions and banks in 2024. There is no announced launch date for the digital real, but the President of the Central Bank of Brazil, Roberto Campos Neto, suggested a 2024 release date in December. The bank is committed to exploring the possibilities of digital currencies and innovating in how it can serve the Brazilian people.

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