The central bank of Brazil (Banco Central do Brasil) has announced the start of a digital currency pilot project as the country becomes the latest to ramp up its efforts to develop central bank digital currencies (CBDCs).

The bank said that the programme would look to replicate the success of its Pix instant payment system and further popularise financial services in the country.

Fabio Araujo, economist at the bank and coordinator of the initiative, said that the public use of the digital currency should commence at the end of 2024 following a testing phase which will include buying and selling of federal public bonds.

He added that the ‘digital real’ will be built on distributed ledger technology (DLT) to support the provision of retail financial services settled through tokenized deposits across the country.


He said: "This environment reduces costs and brings the possibility of financial inclusion for people. You have services that are very expensive to carry out, such as repo operations, which today are only for banks, but which could be performed by anyone with a technology based on digital currencies.

"This could reduce the cost of credit, the cost of improving the return on investments. There is a great potential for new service providers, fintechs, democratising access to the market and offering new services."

The economist said that the country’s CBDC is not designed to leverage digital payments, wth bank deposits continuing to exist. The key difference is that the CBDC would see deposits registered in a more modern environment so financial institutions do not lose this source of credit generation.

He added that “banks are very interested in this new tokenized world” and that the pilot has attracted a lot of interest.

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