Brazilian Central Bank Includes Mercado Bitcoin and Mastercard in CBDC Pilot
Brazil's central bank has authorized Mercado Bitcoin, the largest local cryptocurrency exchange, to participate in the pilot of the country's central bank digital currency (CBDC), known as the digital real. The consortium led by Mercado Bitcoin includes partners such as Mastercard, broker Genial, registrar Cerc, and financial software fintech Sinqia, according to local newspaper Valor.
Previously, Mercado Bitcoin had been excluded from the central bank's selection of 14 participants in May due to the consortium's lack of a regulated financial or payment institution with direct access to Brazil's national financial network. However, Mercado Bitcoin obtained a payment institution license from the central bank on June 2, enabling its participation in the CBDC pilot.
Fabricio Tota, the director of new business at Mercado Bitcoin, highlighted the significance of their inclusion, stating that it validates the central bank's intention to bring innovation to the financial system by involving those who have been working with this technology. The partnership reflects a shift towards collaboration with technology-driven players rather than solely relying on traditional incumbents.
Mastercard, a key participant in the consortium, expressed their enthusiasm for the opportunity to join the Real Digital pilot in Brazil. Walter Pimenta, the executive vice president of Products and Engineering at Mastercard Latin America and the Caribbean, emphasized their commitment to building trust and compliance in the digital assets ecosystem while addressing real-world challenges.
The central bank plans to incorporate participants into the Real Digital Pilot platform starting in mid-June 2023. The consortium aims to test the issuance of the CBDC and treasury bills, as well as evaluate technical aspects of the network and the governance model of distributed ledger technology. The CBDC is scheduled to be rolled out by 2024, with the central bank viewing digital currency as a means to increase financial system participation.
The inclusion of Mercado Bitcoin and Mastercard in the CBDC pilot demonstrates Brazil's progressive approach to embracing digital currencies and fostering innovation within its financial system. As the pilot progresses, it will provide valuable insights into the feasibility and potential benefits of a central bank-issued digital currency in Brazil's evolving financial landscape.