Tech Roundup: Brazil’s closer to its own digital currency

This week. Five-year-old Brazilian is the youngest person in the world to discover an asteroid. Brazil is world’s fifth-biggest consumer of online piracy. Central Bank’s latest step towards a digital currency. 

Central Bank takes next step towards ‘digital Real’

Brazil is moving closer to having its own central bank-issued digital currency (CBDC). Friday is the last day for signups to the LIFT Challenge Real Digital, an innovation lab seeking to source practical and feasible projects to implement a virtual version of Brazil’s currency.

Why it matters. Among other mechanisms, central banks seek national sovereignty through their monopoly over issuing money. However, in the digital world, they face the challenge of controlling the advance of decentralized cryptocurrencies.

LIFT. The laboratory is a joint initiative of Brazil’s monetary authority with the National Federation of Central Bank Employee Associations (Fenasbac).

• “Instead of having the regulatory body thinking about possible use cases for the digital Real, it asks society, it asks innovators. It wants to know what big banks, credit unions, and fintechs think they can do with a CBDC,” says Rodrigoh Henriques, leader of financial innovations at Fenasbac.

Dates. The selected projects will be announced on March 4 and put into development until the end of July. Preference will be given to those that propose solutions in four categories: delivery versus payment (DvP), payment versus payment (PvP), internet of things (IoT), and decentralized finance (DeFi).

• Potential payment solutions that allow both payer and receiver to be offline are also a priority.

What to expect. For Mr. Henriques, there is a possibility that none of the challenge’s project will be considered mature enough to be taken forward this year. However, the expert believes that the initiative will bring solutions to the surface that will allow the digital Real to become a reality in the future.

• “I think that in the same way Open Banking became Open Finance, a central bank digital currency is also about that: it will demand unity between financial...