Mercado Bitcoin Joins CBDC Pilot
Brazil’s central bank has granted approval to the largest local cryptocurrency exchange, Mercado Bitcoin, to participate in the pilot program for the ‘Digital Real’, the country’s central bank digital currency (CBDC).
Consortium Partners and Approval
The approved consortium, led by Mercado Bitcoin, includes renowned financial entities such as Mastercard, broker Genial, registrar Cerc, and financial software fintech Sinqia. Together, they will collaborate to explore the potential of the CBDC in Brazil.
Inclusion of Mercado Bitcoin
Initially, Mercado Bitcoin was not part of the central bank’s selection of 14 participants due to the absence of a regulated financial or payment institution with direct access to Brazil’s national financial network within the consortium. However, the situation changed when Mercado Bitcoin obtained a payment institution license from the central bank on June 2nd.
Testing and Rollout Plans
The central bank plans to incorporate participants into the Real Digital Pilot platform starting in mid-June 2023. The consortium, including Mercado Bitcoin and Mastercard, will engage in testing the issuance of the CBDC and treasury bills. Additionally, they will explore the technical aspects of the network and the governance model of distributed ledger technology.
The Road Ahead
By 2024, the central bank envisions the rollout of the CBDC, aiming to increase financial system participation through digital currency. The inclusion of Mercado Bitcoin and Mastercard in the CBDC pilot marks an important step toward the realization of this goal.
Dangers Of CBDCs
In truth, CBDCs pose significant dangers. They enable complete surveillance of financial transactions, eroding privacy, and may lead to increased centralization, granting governments extensive control over individuals’ money. Cybersecurity risks could expose funds to hacking and theft. Additionally, CBDCs may marginalize cash users and exacerbate inequalities in access to financial services.
But how do you feel about this news? Do you think CBDCs are the way to go? Or Are they the beginning of the end for most modern societies?
