Cryptocurrency companies unite to create use cases for Brazil’s CBDC with central bank approval.
Brazilian exchange Mercado Bitcoin announced its partnership with the Stellar Development Foundation (SDF) on Tuesday. The company said it intends to develop one of the nine projects selected for the LIFT Challenge Real Digital, promoted by the Central Bank of Brazil.
The LIFT Challenge Real Digital are a collaborative environment carried out by the Central Bank of Brazil (Bacen), in partnership with National Federation of Associations of Central Bank Servers (Fenasbac). With the announcement of Stellar's integration, SDF will join the consortium created by Mercado Bitcoin to develop solutions for Real Digital and which also has CPQD and ClearSale.
CEO of Stellar Development Denelle Dixon said that Stellar’s network is prepared to support Mercado Bitcoin and the Central Bank of Brazil as they explore use cases for the Real Digital’s future. “Stellar was designed for asset issuance, and its built-in compliance tools give Mercado Bitcoin a strong foundation to develop a solution with the features that Bacen expects to see,” she claimed.
According to the statement, Mercado Bitcoin selected the Stellar network due to the speed, efficiency and security of the protocol.
"We are in a consortium of companies that have the structure and ambition to build robust solutions for the financial market through blockchain technology. Utilizing the Stellar network will allow us to deliver a complete case for evaluation by the Central Bank," said Reinaldo Rabelo, CEO of Mercado Bitcoin.
In addition to the consortium created by Mercado Bitcoin, the Central Bank of Brazil also chose the DeFi Aave protocol and ConsenSys in partnership with Visa and Microsoft to develop use cases for the nation's Real Digital.
In April, Cointelegraph reported that the president of Brazil's Central Bank had confirmed that the country’s sovereign digital currency pilot will go live this year. However, this release will still be a pilot version and will not be available to the entire population of the country. According to Campos Neto, the Real Digital hopes to enable smart contracts and decentralized finance on the CBDC platform.
“The Real Digital initiative is a response to the rapid progress of digital transformation and society's demand for native means of settlement in a new environment. conditions for important efficiency gains to be achieved", said Campos Neto last year.
Fábio Araujo, coordinator of the Real Digital project within the BC, recently stated that the Central Bank aims to allow the construction or interconnection of the national financial system with decentralized finance (DeFi) and with smart contracts. These are, in his opinion, the great contributions of the blockchain ecosystem and cryptocurrencies.
“These fundamental points of the crypto environment we intend to bring within our regulatory perimeter to do a mass thing to give access to more people. We want to bring smart contract and Defi technologies inside so that we can reach a wider audience," he said.