In constructing its Real Digital, Brazil's central bank is developing mechanisms that may freeze citizens' conversion to CBDCs within the event of a bank run
In a paper recently published by the Bank for International Settlements (BIS), Fabio Araujo, an economist at the financial institution of Brazil (CBB) who is also chargeable for the country’s central bank digital currency work, revealed that the financial authority can have bigger management over the population’s cash once its CBDC is unrolled. Through the alleged
Real Digital, the central bank are going to be able to halt bank runs and impose other restrictions on citizens’ access to cash. Real Digital, the digital version of Brazil’s national currency, has been debated at the central bank since 2015 and can have its 1st tests in 2023 through 9 solutions presented by private firms during the recent raise Challenge event that was reported by the CBB.
Recently reportable that the worth of the forthcoming CBDC would be pegged against the national edict payment system STR, conjointly referred to as the Reserve Transfer System.
Through Real Digital, the central bank says it needs to alter alleged sensible payments among a regulated environment. sensible payments embrace smart contracts, transactions with internet of Things devices and even decentralized finance (DeFi) applications.
In the BIS document, Araujo said the main objective of introducing a CBDC is to supply entrepreneurs with a secure and reliable environment during which to initiate through the use of programmability technologies that make sensible payments a reality.
"Technologies available for smart payments, as seen in crypto assets, create space for brand spanking new business models and are higher suited to satisfy the population's demand," he said.
( Cassio Gusson, Cointelegraph, 2022 )