It is unusual to find someone who still goes to a bank to withdraw money to make payments. Digital transactions, whether through transfers, cards or Pix, make everyday life easier and are already part of the routine of many consumers. And in a few years, Brazilians will have another way of dealing with money. The digital real will be launched, which is currently being studied by the Central Bank (BC). The digital money will be issued by BC.
According to BC data, in June 2021, the total amount of paper money held by people was R$ 283 billion, while the volume of demand deposits (money deposited in a checking account, without remuneration by the bank) was of BRL 333 billion. By adding to this amount other forms of liquidity, such as interest-bearing deposits, repurchase agreements (purchase and repurchase of assets with interest payments) and federal government bonds, there was a total of R$8.9 trillion available digitally. In other words, only about 3% of the resources available for operations in the country are in the form of currency.
The Central Bank says that the creation of the digital real is not intended to eliminate paper money altogether, but the trend is for its use to be reduced further. “The intention is that paper money will coexist with the digital real for many years to come. In BC’s understanding, as the population becomes more comfortable with the new means of digital payments, the use of money in paper format will naturally reduce”, he stressed, in a note to Brazil Agency.
There is no forecast for the launch of the digital real yet. “What we have is a horizon of work, discussions and tests that should last from two to three years. At the end of this period, the BC should have the necessary conditions to decide on the convenience and the best format for issuing a digital real”, declared the institution.
What will digital currency look like?
BC has been working to lay the foundations for the development of CBDC [Central Bank Digital Currency, em inglês].
The digital currency will be guaranteed by BC and financial institutions will only save the money for the customer who chooses the new modality.
Among the guidelines are the emphasis on the development of innovative models based on technological evolutions, such as smart contracts (smart contracts), internet of things (IoT) and programmable money; forecasting usage in retail payments; and the ability to carry out operations online and eventually offline.
Digital currencies in the world
According to information from the Central Bank, the Bahamas were the first country to officially launch its CBDC, the sand dollar, in October 2020. China has a pilot project in some cities and will test foreign visitors at the 2022 Beijing Olympic Winter Games.
The US central bank, the Fed, and the Digital Dollar Foundation, work to launch the digital currency as well. Other countries, such as South Korea, Japan and Sweden, are also studying the launch of the CBDC.
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