Brazil’s Central Bank announced today (7) that the digital real will be called Drex (Digital Real Electronic Transaction). It will be the part of the system that will appear to the user, or in other words, the platform and the retail token. Thus, tokenized reais will use the same name. Therefore, they will follow the same line as what happens today with values in real. If a person or company has a tokenized real deposit in a certain bank, it will have that value in Drex in the account, according to Fabio Araújo, coordinator of the initiative of the new version of the national currency.
Regarding the digital version of the real that will circulate in the wholesale market, there is still no official position of the Central Bank on the issue. This version will be used for operations between the BC and financial institutions and large companies. Drex starts to reach users by the end of 2024.
The banks, the Central Bank reinforced, will not be able to lend Drex to third parties, as happens with physical real. In addition, it will not have automatic income. But there may be exchange of Drex for banknotes. The BC is the one who will do the custody of it.
Drex will not have automatic income
As with Pix, the Central Bank instant payment system, Drex also has an “x” to call its own. According to the bank, the letter conveys the idea of modernity and connection. The typography and graphic elements of the brand refer to the digital universe. And the use of colors, which go from blue to light green, refer to “transaction completed”.
In a webinar about Brazil’s Central Bank Digital Currency (CBDC) today, Araújo reiterated the BC’s vision: that the digital real is attractive for making payments, something that is not yet a priority among those who use cryptocurrencies. In the absence of digital official currencies, people use crypto, he said.
But, when regulated platforms are offered, with known actors, using the national currency is more advantageous, he added. People who have bought cryptocurrencies “are more interested in the price variation than in using it to make payments. With the real, people receive in real and pay rent in real”, he exemplified.
Araújo also said that the cost of using the Drex platform is always associated with a financial service. “It seems that the cost will be much cheaper than what we currently have available”, he added. By using a distributed ledger technology (DLT) platform, the process will count on automation, use of smart contracts. Thus, the dismissal of certain professionals in operations may be possible, using codes instead. “After developing the smart contract, the next cost of it is zero for use”.
Use should grow with digitalization
Aristides Cavalcante, head of the innovation and cybersecurity office of the Central Bank, recalled that the platform of the digital version of the real will allow operations with smart contracts and, therefore, with tokenized assets. An example is the sale of a car, in which the data of the car’s possession and the payment of it are incorporated in the smart contracts. And then the operation happens practically in real time.
“As the economy advances and becomes more digital with tokenization of real estate, music, the digital real platform will allow the private sector to make these exchanges in more efficient and cheaper ways”, Cavalcante added.
One of the cost reductions of operations comes from the lower cost of recovering guarantees. If they are registered in DLT or blockchain, there can be greater certainty of where they are and to whom they belong. In addition, in relation to investments, it is expected that there will be a greater variety than what exists today.
Thus, when opening the bank’s application, the user will be able to choose what type of investment he wants. Besides, all this will be integrated with open finance, said Araujo. Thus, there may be greater competition in the offer of bank products for users.
The pilot of the digital version of the real is in Hyperledger Besu. The consortia that participate in the pilot are integrating with the Central Bank’s platform.
At the beginning of the webinar, Cavalcante, as Araújo had already done on another occasion, defended the movement of BC employees to ask for the institution to hire more employees. In this way, the BC can continue to attract qualified professionals, he said. And he recalled that if there is innovation in the institution, it is because of the dedication of its specialists.