The DREX CBDC will utilize distributed ledger technology (DLT) for settling wholesale interbank transactions, and retail access will rely on tokenized bank deposits.
The Central bank of Brazil continues to push further with its progress o the central bank digital currency (CBDC). Previously popular as Digital Real, the CBDC gets a new official brand name aka the DREX.
On Monday, August 7, Brazil’s central bank unveiled the new brand and logo for its CBDC through a press release. As per the central bank, the brand “DREX” is an acronym. The press release notes:
“‘D’ and ‘r’ allude to Real Digital; the ‘e’ stands for electronic and the ‘x’ conveys the idea of modernity and connection, the use of distributed ledger technology (DLT).”
In addition to unveiling the brand name, the central bank also introduced Drex’s visual identity. The CBDC logo features two arrows within the capital letter “D,” symbolizing the progression from the national fiat currency, the real, to its digital counterpart. The color shift from blue to light green represents the completion of transactions.
The Drex CBDC by Brazil is all set to hit the market next year in 2024. Central bank officials had previously forecasted that the Brazilian digital currency’s adoption would begin by the close of 2024, once the testing phase had been concluded.
However, Fabio Araujo, who leads the initiative at the bank, mentioned that employee strikes seeking improved career opportunities might potentially influence the project.
The DREX CBDC to Bolster Lending and Investments
The DREX CBDC will utilize distributed ledger technology (DLT) for settling wholesale interbank transactions, and retail access will rely on tokenized bank deposits.
In a live discussion hosted by the central bank, Araujo emphasized that the main focus of developing DREX is to enhance access to financial services within the country. “By enabling simple and reliable access to registered values through DLT technology, we reduce costs and democratize access to financial services,” Araujo stated.
He also pointed out that Brazilians are already actively participating in extensive digital payments using the instant payment platform Pix, which was introduced in late 2021 and has been widely adopted. The anticipation now is that DREX will strengthen lending, investment, and insurance services.
“We aim to make these financial products accessible to the public and increase financial inclusion in Brazil,” Araujo added.
Last month, some developers pointed out the loopholes in the code for the DREX. Thus, the central bank might have to conduct some more tests before introducing DREX into the market.
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