27 August 2020 | AtoZ Markets – CBDCs can bring many potential benefits to payment systems. But they can also introduce some risks and challenges. The central bank must consider should the impact on monetary policy and financial stability. Central banks around the world have begun their experiments to issue CBDC.
Brazil Central Bank Forms a Team to Drive CBDC Research Forward
Central Bank of Brazil announced that it established a 12-member intergovernmental group for studying Central Bank Digital Currency. The group will evaluate the benefits of launching CBDC. It will also examine how the CBDC complements Brazil's existing payments ecosystem and its potential economic and social impact.
This study group to improve the payment system between domestic and foreign private and public bodies. Other characteristics include exploring potential models of CBDC, their scope, social benefits, and national challenges. It also plans to consider various cybersecurity, data protection, and regulatory compliance risks in terms of security.
Brazil will use CBDC to improve the financial health of society while at the same time tackling potential risks which expose by this new form of payment. Rafael Sarres de Almeida, an official from the Information Technology Department of the Brazilian central bank, said:
"The subject of digital currencies addressed by central banks has been on many central banks' research agenda for some time. However, this year, there was a greater focus on a more practical approach."
A new group will study how much money can be saved economically by issuing CBDC. The question was raised about whether digital assets would be beneficial to the national economy. The bank's Chief of Cybersecurity and Technical Innovation Department, Aristides Andrade Cavalcante Neto, said electronic payments have increased in recent years, especially thanks to the evolution of mobile devices and communications technology.
"However, our money remains materialized in paper and metal circles, and there is still no digital representation of money accessible to the citizen. So, a central bank-issued digital currency would allow Brazilians to interact with their money in a completely electronic way," he added.
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