The Central Bank of Brazil has disclosed a new set of use cases that will be part of the second phase of the ongoing pilot of its Drex central bank digital currency (CBDC). Among the 13 instances selected from the 46 presented are platforms for tokenizing real estate, liquidity pools for trading public securities, and even automating automobile transactions.
13 Use Cases Approved for Drex Pilot’s Second Phase
Brazil has decided to make its CBDC pilot an opportunity to test different functionalities introduced to automatize several government service processes. The central bank recently announced the 13 use cases that will be included in the second phase of its proposed Drex CBDC. The institution selected these from 46 proposals submitted by 16 consortiums interested in testing their platforms. The platforms include assigning credits with collateralization, establishing liquidity pools for trading government bonds, financing international trade operations, automating car transactions, and real estate platforms.
Key Industry Participants
Among the companies part of this new phase are Mercado Bitcoin, Brazil’s stock exchange B3, Santander, Tecban, XP-Visa, Banco do Brazil, Bradesco, Itaú, Banco Inter, Nubank, and the Brazilian Association of Banks, among others. Bruno Grossi, manager of emerging technologies at Banco Inter, told Valor Economico that besides testing the feasibility of the approved use cases as part of the Drex blockchain environment, these must also comply with the privacy solutions that hide transactions to preserve the banking secret of users in the network.
Privacy Remains a Core Challenge
Grossi also stated each use case will be liberated so other participants can test their feasibility and performance on Drex’s blockchain. “Each of the use cases will be tested by everyone. Collaboration will always be welcome,” he explained. The inefficiency of the presented private solutions was the main reason for the postponement of the completion of the pilot phase of Drex until 2025, and the creation of this new experimental phase. In May, the central bank stated that the solutions trialed lacked the “necessary maturity to guarantee compliance with all requirements and legal issues related to the preservation of citizens’ privacy.”
This second pilot phase marks a significant step in Brazil’s CBDC journey, aiming to balance privacy, efficiency, and innovation. As global central banks accelerate their digital currency research, Brazil’s practical experience could offer valuable insights for other emerging economies exploring similar initiatives.