BC President Roberto Campos Neto says that digital real should benefit from crypto tools.
The president of the Central Bank, Roberto Campos Neto, announced today (30) the Lift Challenge Real Digital, for tests with the new version of the Brazilian currency. The program will be carried out with the National Federation of BC Servants (Fenasbac), which already manages Lift, a laboratory for the development of innovative financial solutions. The information is already on the program’s website.
According to the BC president, the target audience “are market participants, bringing together a qualified audience of banks, payment institutions, fintechs and technology companies interested in developing a minimally viable product based on the digital real.
Registration starts on January 10, 2022 and runs until February 11, 2022. On December 8, there will be a Lift Talk webinar on YouTube to talk about the initiative, Fenasbac innovation leader Rodrigoh told Blocknews Henrys.
“This is a powered Lift, with a lot of weight,” stated Henriques. This is because, in comparison with other versions of Lift, the projects will have to be more mature, as they will have a greater impact on the national financial system. Thus, it requires greater maturity of the proposals. “Central bank digital currency is the next big revolution in the financial system,” he said.
“We don’t have minimum and maximum projects. We are looking for the best ideas”, said Henriques. The announcement of the selected ones is on March 4th and the development until the next 29th of July. If you have a very large group of projects, you can set a maximum number. Lift history was 25 and 11.
Real Digital Lift lasts until the end of July 2022
In this version of Lift, there will be no technology partners, because it is expected that those who make proposals will propose technologies that they use for the challenges of digital currency. However, nothing prevents a technology company from participating along with those in the financial sector, which are the ones that can apply.
Lift, completed Henriques, was always designed to be 100% digital. In this one, “there is a time difference. We will have more time looking at the projects. The traditional one has three months of development and this one is four months”.
There will be biweekly meetings for the development and presentation of the project’s progress report. “There is no promise of adoption of the project by the regulator. What we know is that everyone wins in the end” in technology, models, solutions, regulation, for example, according to the Fenasbac representative. “And then, each of the agents does what they can do best with that information.”
The objective of the Lift of the digital real, stated Campos Neto, is to evaluate use cases of the new version of the digital real and its technological feasibility. Therefore, the focus will be directed to the use cases of smart payments in an online environment that can. The list that the BC president released includes:
– Delivery against Payment (DvP), aimed at settling transactions with digital assets, both native to the digital environment and tokenized;
– Payment against Payment (PvP), aimed at the exchange between currencies;
– Internet of Things (IoT), aimed at algorithmic settlement or directly between machines; and
– Decentralized finance (DeFi), aimed at protocols with settlement based on a central bank’s digital currency (CBDC). To do so, they should consider compliance and oversight requirements.
BC is also interested in offline transactions.
In addition, BC is also interested in solutions where both payer and receiver are offline. There is a consensus that this type of function increases the inclusion in the use of the digital real.
In evaluating the proposals, BC and Fenasbac will consider the infrastructure of the projects. For this, they will analyze, for example, issues of interoperability with other payment systems, solution scalability, accessibility and usability.
In addition, they will consider information privacy, a very sensitive topic in the discussion of CBDCs and programmability potentials. Today, it is possible to schedule, for example, a payment. But if the digital real uses blockchain, the programming goes in the network and asset code, which makes the transaction much easier, in addition to reducing costs.
Campos Neto announced the Lift for digital real at the end of the seventh and final webinar about the digital real that BC did this year. During the speech, the institution’s president repeatedly cited the benefits of decentralized cryptocurrencies and finance, in addition to tokenization. And he indicated how much he appreciates these solutions, although he defends regulation.
He mentioned that they are already in use, they need regulation, but he signaled that it is in the direction of something like that the BC intends to take the Brazilian currency, as anticipated by Blocknews.
“Digital Real is a response to rapid progress and demand from society”
“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,” he said.
For him, there has been a lot of progress since the creation of the working group on digital currencies in 2020. “With each step we take, the conditions have matured so that important efficiency gains can be achieved. But this is an evolutionary process, where risks and opportunities must be constantly evaluated.”
Today, there is Lift Learning, which is for initial ideas, which involves academia and financial institutions and the regulator, explains Henriques. This goes down to proof of concept (PoC). The Lift Lab goes from PoC to a working prototype. Above that, it is whether the company has a product and is going to test the regulatory issue, which is what enters into the sandbox do BC. The Challenge goes a little higher than the Lab, but even so it is not “I’m in the market and I’m going to operate the product”, according to Henriques.
*Report updated at 1:15 pm on 11/30/21 with an interview with Fenasbac interview.