ISO 20022: A Financial Messaging Revolution
Douglas da Silva | May 22, 2023
Digital Brazilian Real, also known as Real Digital, is Brazil’s official digital currency and has recently undergone a pilot project from the Central Bank of Brazil. With a focus on programmable money and asset tokenization, this ground-breaking initiative is expected to completely alter the Brazilian financial landscape.
Today we’re looking at Brazil’s distinctive Central Bank Digital Currency (CBDC) strategy, potential business applications, and opportunities for innovation in this dynamic digital currency market.
Central Bank Digital Currencies are cryptocurrencies developed, issued, and managed by a central bank. They’re essentially the same thing as traditional, physical money — just in a digital form.
CBDCs are designed to be a stable, digital alternative to fiat currencies and are designed to work in tandem with the physical currency.
A country that creates its own CBDC coins will also have physical coins, paper money, and digital money that all use the same value system and can be used interchangeably.
Learn more about: How Blockchain Can Reshape the Global Economy with CBDC
With that in mind, Brazil has taken a different approach to its CBDC. In contrast to other CBDCs, Brazil’s Real Digital was initially designed for something other than retail payments.
This is because Brazil already has an established and popular digital payment system called Pix, which successfully handles daily transactions.
Pix went live in November 2020 and has been very successful with the Brazilian public. In its first year, the instant payment system saw more than 330 million individual keys in operation and acted as the first-ever digital money transfer for 45 million people.
This enthusiastic embrace of a digital payment system encouraged the development of a CBDC for Brazil. While Real Digital is expected to be integrated into Brazil’s existing digital payment systems, the Central Bank of Brazil also plans to focus on several different use cases in addition to daily transactions.
The first focus of Real Digital is investigating new goods and services that companies and financial institutions can create with the help of this new digital currency. Because Brazil has already so readily accepted the Pix payment system, companies have the opportunity to build Real Digital into more types of transactions.
Fábio Araujo, an economist at the Central Bank of Brazil coordinating the Real Digital initiative, hopes that Real Digital will “provide entrepreneurs with a safe and reliable environment to innovate through the use of programmability technologies, such as programable money and smart contracts.”
By using Real Digital with smart contracts or Internet of Things (IoT) devices, this new currency has the potential to speed up and automate payments, purchases, and transfers.
One of the most exciting aims of Real Digital is improving financial inclusion across Brazil. Just as Pix has encouraged millions of people to try out digital payments, the hope is that Real Digital will help improve financial education and banking adoption among Brazilian citizens.
The Real Digital pilot project has the potential to open up a wide range of cutting-edge uses beyond standard payments, creating new opportunities for businesses. Some examples include:
As Brazil’s official digital currency pilot project advances, now is the perfect time to explore the potential of Real Digital for your business.
With a focus on programmable money and asset tokenization, Real Digital from Brazil stands out as an innovative and promising development in the world of CBDCs.
The pilot project highlights smart contracts, creative applications, and compatibility with current financial infrastructure, emphasizing its potential to promote financial innovation and business expansion in Brazil and beyond.
Businesses looking to create cutting-edge solutions tailored to their needs can stay informed by working with the right partners.
At Cheesecake Labs, our experience with blockchain technology and our status as a Stellar integration partner make us the perfect choice to help businesses leverage Real Digital’s exciting opportunities.
We’ve even partnered with Mercado Bitcoin, CPQD, ClearSale, and Stellar to use Real Digital for Delivery versus Payment transactions on the Stellar blockchain network for the Central Bank of Brazil’s LIFT Challenge.
This project has afforded the Central Bank of Brazil a global innovation award and it has given us hands-on experience with the power and potential of the Real Digital.
Get in touch with the team at Cheesecake Labs to learn how we can help you take advantage of this ground-breaking digital currency. We can’t wait to hear about your ideas!
Also known as Doug Gimli, I'm a developer that works with interactive solutions facing web projects, trying every day to deliver a full and great experience to users.
Douglas da Silva | May 22, 2023