The Brazilian Central Bank announced this week that it would create a new BRL 200 (USD 39) bill, to be launched in late August. The decision comes amid a rise in the use of printed currency, despite the potential sanitary risks this may pose vis a vis Covid-19 contamination. In fact, the pandemic has boosted cash use, as Brazilians are seeking to stockpile money as emergency savings in response to economic uncertainties.
The bank plans to request an initial budget of BRL 113.4 million from the National Monetary Council (CMN) to print the first 450 million units of the new note, totaling BRL 9 billion to be slowly introduced in the market over the remainder of 2020.
The move caught many by surprise, as it goes in the opposite direction to decisions taken in other parts of the world. In South Korea, for instance, authorities literally burned cash and took custody of banknotes as a precautionary measure against Covid-19 transmission. Moreover, the Central Bank itself has been pushing toward digitizing transactions in Brazil. But, as reporter Natália Scalzaretto explained in our July 10 Tech Roundup, the amount of banknotes circulating in Brazil peaked to a record 8 billion bills during the pandemic — despite hygiene issues.
There are two main reasons for this increase in notes: (1) the BRL 600 coronavirus emergency salary forced the Brazilian Mint to print an extra BRL 9 billion in May; (2) people didn’t have anywhere to use their physical...
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