In the pilot, banks and fintechs successfully tested hundreds of transactions – issuing, transferring, and redeeming Drex tokens – showing that a blockchain-based digital real can work. However, the current technology isn’t fully ready for prime time.
The findings offer a rare glimpse into the real-world challenges of implementing a central bank digital currency. Here are the main takeaways commented by Bianca Lopes, Executive Board Member of Kanoo Pays – first CBDC digital wallet provider in the Caribbean; responsible for tokenizing govt relief funding and payments.
𝐁𝐚𝐥𝐚𝐧𝐜𝐢𝐧𝐠 𝐏𝐫𝐢𝐯𝐚𝐜𝐲 𝐚𝐧𝐝 𝐂𝐨𝐧𝐭𝐫𝐨𝐥:
BCB found a tough “trilemma” between privacy, programmability, and oversight.
Advanced cryptography (like zero-knowledge proofs) can hide transaction details to protect user privacy, but this also makes it hard for regulators to monitor illicit activity or even for the system to run complex smart contracts.
𝐓𝐞𝐜𝐡𝐧𝐨𝐥𝐨𝐠𝐲 𝐒𝐭𝐢𝐥𝐥 𝐍𝐞𝐞𝐝𝐬 𝐌𝐚𝐭𝐮𝐫𝐢𝐭𝐲:
In the pilot, banks and fintechs successfully tested hundreds of transactions – issuing, transferring, and redeeming Drex tokens – showing that a blockchain-based digital real can work. However, the current technology isn’t fully ready for prime time.
For example, if everything is private on the ledger, it breaks some functionality and compliance needs. The platform needs more development before a national launch.
𝐍𝐨 𝐈𝐦𝐦𝐞𝐝𝐢𝐚𝐭𝐞 𝐋𝐚𝐮𝐧𝐜𝐡:
Given these hurdles, Brazil’s central bank is not rushing to launch Drex widely.
The project is moving into a second phase of testing to solve these issues and explore more use cases with industry participants.
The message is clear: security, data protection, and reliability come first, even if it means delaying the rollout.
𝐂𝐨𝐥𝐥𝐚𝐛𝐨𝐫𝐚𝐭𝐢𝐨𝐧 𝐢𝐬 𝐊𝐞𝐲:
The central bank is calling for teamwork among regulators, tech developers, banks, and academics to overcome the technical challenges.
This collaborative approach will help ensure the digital currency serves society’s needs without compromising trust or compliance.
It’s a reality check that launching a CBDC isn’t just flipping a switch – it involves balancing innovation with legal and security requirements.
Brazil’s experience with Drex is providing valuable lessons for countries around the world working on digital currencies. By tackling issues like privacy vs. oversight now, BCB is paving the way for a more robust and trustworthy digital money ecosystem in the future.
More about Drex – Digital Brazilian Real
Banking 4.0 – „how was the experience for you”
„So many people are coming here to Bucharest, people that I see and interact on linkedin and now I get the change to meet them in person. It was like being to the Football World Cup but this was the World Cup on linkedin in payments and open banking.”
Many more interesting quotes in the video below:
