The Central Bank of Brazil will focus its first digital real tests on determining the levels of privacy and security that can be achieved with the proposed central bank digital currency (CBDC) infrastructure. The tests will be conducted later this year and will set up a simplified operation to transact with a still-to-be-determined tokenized asset.
Central Bank of Brazil to Launch Digital Real Test Operation Later This Year
The Central Bank of Brazil is accelerating the digital real project, getting close to its pilot test phase. The institution announced that it would be conducting a series of operative tests to check the functionality of the proposed architecture for the system.
Fabio Araujo, the coordinator of the digital real project at the Central Bank of Brazil, explained that security and privacy would be two of the most important areas to be examined with these tests. Araujo told Broadcast:
We are going to simplify the operation, but we are going to have several participants exchange information to see the degree of security and privacy that we can bring to the system. The pilot is focused on that.
Araujo explained that the objective behind this test would be to determine if the transaction information leakage derived from the system is compatible with current regulatory requirements.
The tests described by Araujo would start after the current laboratory phase of the digital real, which is currently being conducted as a part of the LIFT challenge, an open project that brings various organizations together. The challenge attracted nine different proposals which aim to include the digital real as part of economic endeavors.
Institutions and organizations part of the LIFT challenge must deliver their final project reports on April 25. The new set of pilot tests is expected to be conducted after this event. However, the pilot will be limited in scope, shown in a simplified operational environment, and will only feature the introduction of another yet unselected tokenized asset for transactions.
The test will also allow the Central Bank of Brazil and the Brazilian Securities Commission to examine how third parties could interact with the system, including banks, that will be able to issue their own tokens backed by the digital real. This expanded test environment will be open to institutions and banks in 2024.
While there is still no announced launch date for the digital real, Roberto Campos Neto, president of the Central Bank of Brazil, hinted at a 2024 release date in December.
What do you think about the announced focus of the digital real tests? Tell us in the comments section below.
Sergio is a cryptocurrency journalist based in Venezuela. He describes himself as late to the game, entering the cryptosphere when the price rise happened during December 2017. Having a computer engineering background, living in Venezuela, and being impacted by the cryptocurrency boom at a social level, he offers a different point of view about crypto success and how it helps the unbanked and underserved.
Image Credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.