This week, Brazil’s go at a digital currency. What earnings reports tell us about the crisis. Plus, job figures begin to come back positive.
Brazil’s Central Bank wants to issue a digital currency
The Brazilian Central Bank continues its efforts to modernize and digitize the Brazilian economy. After approving regulations for instant payment system PIX and green-lighting open banking, the monetary authority now plans to issue its own Central bank digital currency (CBDC).
What CBDCs are. According to the Atlantic Council, “CBDCs are the liability of the central bank, which means the government must maintain reserves and deposits to back them up, rather than a private bank. […] As decentralized digital currencies such as Bitcoin have become more popular, the world’s central banks are beginning to realize they need to get in the game or let the evolution of money pass them by.”
The Brazilian case. The Central Bank launched a working group to identify potential risks for cybersecurity, data protection, and necessary regulations. They also want to evaluate the impacts of such an initiative on monetary and economic policies — as well as how a CBDC could work in tandem with recent digitization initiatives such as PIX.
Pros. Advocates...