- Banco Central do Brasil is looking to integrate an offline feature into the DREX central bank digital currency (CBDC).
- Munich-headquartered Giesecke+Devrient (G+D) will be the Brazil central bank’s partner for its offline CBDC.
Proposals for central bank digital currencies have been on the table of several countries in the past few years, but we have yet to see their successful launch. The central bank of Brazil, Banco Central do Brasil, is one of the key players looking to roll out its digital currency called “DREX” by the end of this year.
DREX Offline Feature
Before its commercial launch though, the central bank is looking to integrate offline functionality into its CBDC. Recently it announced a partnership with Giesecke+Devrient to put this plan in motion.
G+D will provide lead and technical guidance to the pilot, which is expected to include a cross-border payment system in addition to its offline feature. The Brazilian central bank is yet to offer more information about the technical specifications of its offline CBDC, but the official statement of Banco do Brasil Vice President for Digital Business and Technology Marisa Reghini broadly suggests that its goal is to open its access even to the unbanked.
“With offline payment, we can bring ease and technology to people who have difficulty accessing the technological infrastructure,” explained Reghini. “Brazilians can benefit from the solution in their daily lives, carrying out secure transactions in local shops, for example, without the need of a bank account.”
Meanwhile, Banco do Brasil’s partner wants to ensure that the platform can operate 24/7 for everyone in order to promote inclusivity. The firm aims to share the experience it gained during its participation in Hong Kong‘s offline CBDC pilot, which was also joined in by the technical persons responsible for the Ghana retail CBDC experiment as well as other key representatives of commercial banks, merchants, payment service providers, and individual stakeholders.
“A CBDC must work for everyone, anywhere, at any time,” commented G+D Managing Director Raoul Herborg. “Only in this way can it be a truly inclusive public digital currency.”
Learning from Pix
DREX is poised to go head-to-head against Pix, the country’s popular instant payment platform with over 150 million users. Based on previous reports, the CBDC will be utilizing distributed ledger technology (DLT) for the settlement of interbank transactions. On the other hand, the retail side will be able to access it through tokenized bank deposits.
For Fabio Araujo, Banco do Brasil’s coordinator for its CBDC project, DREX is all about reducing transaction costs and democratizing access to financial services within the country’s populace. Taking notes from the lessons learned in the implementation and wide adoption of Pix, DREX looks to boost lending, investments, and insurance services in Brazil through the program.