Brazilian Central Bank to accelerate blockchain and digital currency projects

Photo: Diego Grandi/Shutterstock

Brazil’s Central Bank announced the fifth stage of its LIFT LAB innovation laboratory, launched in 2018 and run in partnership with Fenasbac, a workers’ association.

Most of the projects in this phase are linked to so-called decentralized finance (Defi) and smart contract management via blockchain technology. This is also a sign of how these areas have gained space within LIFT LAB, as earlier iterations of the laboratory included no projects on tokenization or crypto.

Brazil’s largest private bank, Itaú managed to have two of its projects selected. One initiative, Defi Liquidity Pool, aims at allowing custody services, currency trading, and investments to take place by way of a smart contracts blockchain platform. The other project seeks to find ways of using PIX offline through NFC-enabled devices and QR codes. In this system, transactions would be carried out based on pre-reserved offline balances.

That would be an effective solution for situations in which easy internet access is not available, or when the security of offline transactions may be required.

Another selected project comes from G10 Bank, a fintech created by the G10 Favelas group, comprising ten of Brazil’s largest favelas. The idea is to grant microloans of between BRL 1,000 to BRL 15,000 to vulnerable favela residents.

The innovation aspect of this project lies in its credit analysis and proof of registration procedures, which would be carried out by “street presidents” — prominent members of the community who would be tasked with organizing this stage of the operation.

Startup Lovecrypto proposed a project testing the Real Digital, the Central Bank’s digital currency plan. The fintech will experiment with interoperability between a digital currency and two other systems: PIX and a public blockchain built on the Ethereum platform.

The projects effectively start in the second week of September, and the final results of the prototypes will come in December.

Fabiane Ziolla Menezes

Former editor-in-chief of LABS (Latin America Business Stories), Fabiane has more than 15 years of experience reporting on business, finance, innovation, and cities in Brazil. The latter recently took her back to the classroom and made her a Master in Urban Management from PUCPR. At TBR, she keeps an eye on economic policy, game-changing businesses, and people driving innovation in Latin America.