Digital real: BC wants to use tools like smart contracts for flexibility.
The Lift Challenge – Real Digital, an initiative of the Central Bank (BC) and the National Federation of Central Bank Servers (BC) for projects that will test use cases of the digital real, received applications for 47 projects. These are from 43 companies in Brazil and other countries, such as Sweden, UK
United States, Germany, Israel and the United States (USA).
The selected projects is forecasted to be released on March 4th and the official start of the Brazilian BC digital currency (CBDC) tests will be on March 28th. The selected projects must present use cases of the digital real from technological and innovative processes, according to the institutions. Large IT, payments and blockchain solutions companies have shown interest in the Lift Challenge, Blocknews has learned.
One of them is the German Giesecke+Devrient (G+D), which develops financial and money printing solutions. In addition, it is participating in several CBDC initiatives around the world, including countries in Europe and Ghana, and won a competition in Singapore.
The Lift Challenge set as a rule the registration of companies in the financial sector. This includes banks, cooperatives, payment institutions, fintechs and IT solution providers.
The interest in Brazil makes perfect sense, after all, it is about testing the digital currency of one of the largest economies in the world. In addition, there are other aspects, such as the fact that the financial system is advancing in digitization with Pix, for example, and the fact that the Brazilian BC wants to connect the digital real with decentralized finance protocols (DeFis). This means that you can have blockchain in the digital real world, making this version of the currency go beyond existing services like Pix.
Lift Challenge will have complex tests of the digital real
Another point is that the internet in Brazil is not accessible to everyone and not at all times in different parts of the country. Therefore, this raises the discussion of the possibility of transactions also offline, which is not something simple and that other BCs also consider.
According Rodrigoh Henriques, LIFT Lab coordinator in a statement from the institutions, “the number is a positive surprise as the LIFT Challenge projects require greater complexity both from the point of view of innovation and the technical capacity of the participating companies.
For Fabio Araújo, coordinator of the LIFT Challenge, the challenge will be important to understand and define how the digital real can complement and contribute to a payment system that is already efficient with Pix. “We need to study what the digital real can add to people’s lives. We realized that there is a very creative market to present innovative projects.”
According to a statement from the organizers of the Lift Challenge, experts from both institutions will analyze the projects to make the selection. During the selection process, the Federation and BC may contact applicants to deepen their understanding of the use case, proposed technologies, and project execution capability during the four-month acceleration.