Brazil could issue its own digital currency in 2022, according to the governor of the country’s central bank.
Roberto Campos Neto, governor of the Banco Central do Brasil (BC), has explicitly stated that digital currencies will be the future of the financial system, and that instant bank payments, open banking and exchange rate modernization could arrive within the next two years.
This was reported by Correio Braziliense who quoted the words spoken on Wednesday by the governor during an event promoted by Bloomberg.
Campos Neto said:
“To have a digital currency, you need an instant payment system that is efficient and interoperable; an open system, where you can create competition; and a currency that has credibility, is convertible and international. After that, I think you’ve got all the ingredients to have digital currency. We think we’ll have it by 2022”.
According to the governor, the issuance of a digital currency would be the consequence of the ongoing process of digitization and modernization of the financial system, already started in Brazil thanks to the innovation program launched by the central bank itself some time ago, well before the coronavirus emergency.
The launch of the system that will allow instant bank payments (PIX) is already planned for November in Brazil, and the implementation of Open Banking should be launched by the end of the year, with the precise aim of increasing competition within the national financial system.
Another key point of this innovative process is the bill, presented in 2019, to modernize the Brazilian foreign exchange system. This project should be voted on in the next two weeks, which is why Campos Neto believes that the conditions for the issuance of a digital currency by the central bank in Brazil could already be in place in 2022.
In fact, two weeks ago the same CB set up a working group to analyze the possible impacts of the possible issuance of a digital currency in Brazil, with the task of presenting its conclusions on this issue within six months, or at most one year.
According to the CB, a central bank digital currency (CBDC) differs from trustless cryptocurrencies, such as bitcoin, because it is only a new form of representation of the fiat currency already issued by the national monetary authority, i.e. it is an integral part of the country’s monetary policy. Therefore the “Digital Real” would be the same currency already in circulation (Brazilian Real), but issued in digital form only.