Digital Real Pilot to Run on Ethereum-Compatible, Permissioned Blockchain

Digital Real Pilot to Run on Ethereum-Compatible, Permissioned Blockchain

According to the Central Bank of Brazil, the digital real pilot project will use an Ethereum-compatible, permissioned blockchain for the issuance of the tokenized version of the country’s currency. Hyperledger Besu, the open-source platform elected for the tests, will allow the project to run without any licensing costs and to deal with maintenance costs later, if the platform is definitely chosen. Tokenized Digital Real Pilot to Use Ethereum-Compatible Hyperledger Besu

Brazil continues to move forward with its plan of delivering a working version of its own central bank digital currency (CBDC), the digital real, for the end of 2024. According to reports, the central bank of the country chose Hyperledger Besu, an open-source, Ethereum-compatible blockchain platform, as the base upon which to run the tokenized version of the digital real.

Local analysts believe the compatibility with Ethereum might bring a slew of third parties to develop applications and services using the tokenized digital real, opening the economic playing field to more competition. However, this could also minimize the role of banks in the new digital economy. On this, JC Bombardelli, CTO of ed-tech startup Gama Academy, stated: I don’t think it’s a total nod to the defi world because that would mean giving up a lot of controls that the central bank would never want to have.

Another reason for choosing Hyperledger Besu would be its open-source origins, which would allow the government to use it without having to pay for licenses. Two-Tier Structure

The tests, which are slated to start this month, will only include the tokenized version of the digital real, destined to be used in various transactions and issued by private banks with deposits as collateral.

The final structure of the digital real will include a two-tiered system, in which the real currency will only be managed by authorized institutions. On this, Fabio Araujo, coordinator of the digital real projects at the Central Bank of Brazil, stated: The regulatory framework will be the current one to avoid asymmetries in relation to what exists today. The digital real will serve more for interbank transactions and the tokenized real will be a kind of stablecoin issued by banks.

The digital real structure allows banks to keep their functions in the system and answers to a series of privacy and compliance worries. However, other CBDCs like the Chinese digital yuan, deliver the actual currency to its users and can be used directly to make and receive payments via a digital wallet. Tags in this story Brazilian, CBDC, Central Bank of Brazil, chinese, digital real, Digital Yuan, Ethereum Compatible, fabio araujo, Hyperledger Besu, Open Source, tokenized, two tier

What do you think about the decision to use Hyperledger Besu, an Ethereum-compatible system, for the issuance of the digital real? Tell us in the comment section below. Sergio Goschenko

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. Russian Bank Issues Bank Guarantee in Chinese Yuan Using Blockchain FINANCE | Mar 2, 2023 Germany’s DZ Bank to Offer Crypto Custody With Swiss Firm Metaco FINANCE | Feb 25, 2023

Image Credits: Shutterstock, Pixabay, Wiki Commons Previous articleNew York Attorney General Files Lawsuit Against Kucoin and Declares Ethereum a Security 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. Read disclaimerShow comments More Popular NewsIn Case You Missed ItNFT Sales Volume Saw a Small Uptick This Week — Moonbirds, Mutant Apes Take Top Sales

Non-fungible token (NFT) sales saw a small uptick over the last week as $658.4 million in NFT sales were recorded, up 3.35% in seven days. Out of 15 blockchains, Polygon-based NFT sales saw the largest increase in volume, jumping 106.68% ... read more.Bill ‘On Digital Currency’ Caps Crypto Investments for Russians, Opens Door for Payments UAE Airliner Emirates to Launch NFTs and Experiences in the Metaverse Interest in Real Estate Investments in Spain Grew 400%, With Some Using Crypto and Stocks as Payment Method Survey: Adoption in Argentina Grows, With 12 out of 100 Adults Having Invested in Crypto