This article is from cointelegraph.com.br and the original article can be read here in Portuguese
The technology underlying cryptoassets triggered an irreversible process of tokenization of the economy and the Central Bank’s digital currency (CBDC) will have the primary role of providing the infrastructure for asset tokenization, said the president of the central bank, Roberto Campos Neto, during the opening panel of the Rio Crypto Summit this Monday, 6th, in Rio de Janeiro.
Referring to crypto-assets, Campos Neto said that the great revolution implemented by Bitcoin (BTC) and blockchain technology was the possibility of extracting value from an infinity of assets through tokenization:
“So what people are doing is finding something that has value, putting encryption around it, adding it to a distributed database where you can verify ownership and transfer values, using this technology to extract value from something. What is at the heart of the debate is not cryptocurrencies or CBDCs, but the tokenization of the economy. You add value and trade things in the form of tokens.”
Private Stablecoins
The current currency of the Brazilian economy after the implementation of the digital real will be based on stablecoins issued by banking institutions. Thus, the digital real should not be a currency for everyday use.
Campos Neto stated that the central bank will encourage banking institutions to issue private stablecoins backed by the digital real:
“Banks will be able to issue stablecoins on their deposits and they will develop a technology for that, they will have to invest, because they can make gains. And once they have developed that, the protocols for issuing stablecoins on deposits will basically be the same for monetize various other digital assets.”
The model outlined by the Central Bank predicts that banks will be able to monetize their own deposits, through tokenization:
“By monetizing deposits, you inherit the pre-existing regulation on bank deposits, and that makes it much easier. And banks can develop a system with the same structure that they already use for deposits. So, the way we are creating our CBDC has several advantages over what I’ve seen out there.”
In addition, the BC president argued that this model should also foster the securitization market. In Campos Neto’s view, the protocols used by banks to issue their own stablecoins will encourage securitization:
“Another thing we did, on the other hand, was to give banks the ability to have liquidity in exchange for private assets. When you put these two things together, you securitize credit much faster.”
“Our objective is to monetize assets. And the biggest problem is how to do the CBDC without harming the ability of banks to provide credit” concluded Campos Neto.
Crypto asset regulation
Once again, the BC president spoke about the regulation of crypto assets in Brazil. This time, he highlighted the risks of concentrating the custody of crypto-assets of Brazilian users under the control of some exchanges:
“We have 83% of all crypto assets with four custodians. It’s dangerous.”
Campos Neto stated that the regulation proposed by the Central Bank will require exchanges to prove ownership of traded assets. According to him, there is a risk that when buying crypto-assets entrusting custody to exchanges, they are buying participation certificates on the assets – and not the asset itself:
“People aren’t buying crypto, they’re buying certificates that supposedly have a cryptocurrency behind it. If we don’t regulate [this market] we won’t know.”
Initially scheduled to take place later this year, the tests for the implementation of the digital real were postponed to 2023 as Cointelegraph Brasil recently reported.
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