Posted 2 years ago | by Ben Armstrong

Brazil’s Central Bank is Taking an Interest in Central Bank Digital Currency

In a recent study published by Brazil’s Central Bank, a team was created to discuss the intricacies of introducing a central bank digital currency (CBDC). The group consists of 12 members with the goal of digitising the paper bound currency.

The coordinator of the intergovernmental group and also a member of the Central Bank IT department, Aristides Andrade Cavalcante Neto, recognizes the lack of digitalisation of paper money in regards to the ever-evolving technology of electronic payment and mobile devices.

He commented,

“However, our money remains materialized in paper and metal circles, and there is still no digital representation of money accessible to the citizens. So, a digital currency issued by a central bank would allow Brazilians to interact with their money in a completely electronic way”

The paper indicates that the Central Bank has already had its interest in CBDC technology in previous years, but due to China’s speedy attempt at its CBDC that is now in phase 3 of its trial, the Central Bank is now rushing to catch up with, “a greater focus in a more practical approach”.

What Would a CBDC Bring to Brazil?

The study highlighted the potential benefit that would come with implementing the CBDC. One of its main benefits is the reduction in the cost of issuing and maintaining physical money as it's often very expensive. The whole process seems to cost around 1 to 2% of GDP the paper cited.

According to the bank,

“The issuance, custody, distribution, handling by trade, collection, disposal, and other indirect costs are approximately R$90 billion per year, in line with other countries, considering that it usually varies between 1 % and 2% of GDP”

Furthermore, a CBDC could take part in safeguarding Brazil’s financial citizenship program. The motivation behind this study was pushed by China’s intentions to implement its own CBDC, but that is on hold.

China Backs Off the Digital Yuan

China’s Central Bank official shared that due to the tattered condition the economy was left with after Covid-19, China is rushing into economic recovery and is maintaining a “normal” monetary policy according to Reuters.

With the economy in no such state for CBDC implementation, the project has been delayed, but with the intention to use it during the Winter Olympic in 2022. With the extended timeline, Brazil and other countries that are planning or already testing its CBDC to catch up.

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About Ben Armstrong

ef4f73e9ddeb61becab57469962fa946?s=90&d=blank&r=g Brazil’s Central Bank is Taking an Interest in Central Bank Digital CurrencyBen Armstrong is a YouTuber, podcaster, crypto enthusiast, & creator of Better known as BitBoy Crypto, he works hard to educate and inform the crypto community.

Ben has been involved with the world of cryptocurrency since 2012 when he first invested in Bitcoin. He used Charlie Shrem's BitInstant & lost Bitcoin in the Mt. Gox hack.

In 2018, Ben decided to go "full-time crypto" and focus all of his time and energy into expanding the reach of crypto.

If you have any questions or comments please feel free to email him at or contact him on Twitter @BitBoy_Crypto.