Brazil’s central bank picks Visa, Microsoft & others for its CBDC pilot

Recently, Brazil announced participants for its central bank digital currency pilot. Many prominent companies kike Visa and Microsoft are participating.

Brazil has joined the growing list of countries that are exploring the possibilities of central bank digital currency (CBDC).

The Central Bank of Brazil, the Banco Central do Brasil, has revealed the participation of 14 selected for its CBDC pilot. These institutions include major local private banks such as Bradesco, Nubank, and Itaú Unibanco, the local stock exchange B3, among others. Even multinational companies such as Microsoft and Visa are participating in the pilot run.

The country’s central bank will begin adding participants into the Real Digital Pilot platform around the middle of June 2023. In fact, it had recently published the final list of CBDC pilot participants, that were chosen from a pool of 36 bids made by single companies and consortia, which resulted in “totaling more than 100 institutions.” These include various financial sectors such as payment institutions, crypto companies, cooperatives, payment settlement institutes, etc.

In the initial phase, the central bank will test the privacy and programmability functionalities of its platform via a single use case, i.e., a delivery versus payment protocol for federal public securities.

Brazil officially announced its CBDC pilot in 2022. Interestingly, the Latin American country has no plans for a retail CBDC. Hence, the trials will make use of the CBDC for interbank transactions, while the consumer-facing element will use tokenised bank deposits.

Several nations making progress in CBDC research

With the growing popularity of CBDCs and a step towards digitisation of the economy, many nations have taken significant steps towards piloting CBDCs, such as Australia, Thailand, Russia, and many more.

India too had launched the CBDC pilot in the retail and wholesale segments in November 2022 and December 2022, respectively.