Brazil is set to be among the pioneering nations to introduce a Central Bank Digital Currency (CBDC), specifically the Digital Real (DREX). Slated for adoption in 2024, DREX will serve as a comprehensive replacement for the traditional real and will be widely accessible to the public.
Brazilian consumers and businesses have long been accustomed to digital transactions facilitated by bank accounts, online transactions, and payment apps, like the popular PIX platform, which is overseen by the Central Bank of Brazil. However, these forms of money are liabilities of private entities such as commercial banks and fintechs. In contrast, DREX will be a liability of the Central Bank, making it the safest digital asset available with no associated credit or liquidity risk.
DREX could also provide more information than the simple face-value of the real in either physical or digital form. For instance, in a car purchase, both the money and title can be attached to the transaction along with tax compliance using DREX. This ensures that the transaction only concludes at the Central Bank when all conditions have been met (i.e., digitally approved), allowing for the simultaneous transfer of money, property, titles, and taxes.
The introduction of DREX has the potential to significantly reduce transaction costs and expand access to complex transactions for products, real estate, and services. This could lead to a revolution in financial services and democratize access to finance. However, it could also lead to disintermediation from banking services and a significant loss of traditional bank deposits, affecting credit funding.
Once implemented, DREX will likely become the standard form of reserves held at the Central Bank and the sole means of exchange within all parts of the financial system, including the monetary authority. As DREX operates on blockchain technology, it would enhance transaction security within the financial system through real-time and secure clearing. However, it could also affect monetary policy and the effectiveness of policy rates set through interventions in government debt markets.
To discuss these matters and more, the Brazilian-American Chamber of Commerce has assembled an outstanding panel of experts, including DREX’s creators, implementers, and key analysts, who will assess its potential impacts.
9:00 – 10:00 a.m. – Panel Discussion
10:00 – 10:30 a.m. – Q&A
Paulo Vieira da Cunha, Partner, Verbank Consulting, LLC
KEYNOTE SPEAKER & MODERATOR:
João Manoel Pinho de Mello, Partner, Opportunity Gestora
Fábio Araujo, Economist, Central Bank of Brazil
Fernando Mirandez Del Nero Gomes, Partner, Pinheiro Neto Advogados
Ana Gonçalves, Partner |DAT Digital Assurance & Transparency – Financial Services|, PwC Brasil
Members and Non-Members: Free
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