Visa and Microsoft Join Brazilian CBDC Pilot: Who Else Is Participating?

Visa and Microsoft Join Brazilian CBDC Pilot: Who Else Is Participating?

The world of central bank digital currencies (CBDCs) is expanding rapidly, with more and more countries exploring their potential uses. Brazil is no exception, as its central bank prepares to launch a pilot project for its own digital currency, the digital real. The project has attracted significant interest from both national and global companies, many of whom will participate in the upcoming CBDC pilot.

Banco Central do Brasil, the country’s central bank, will begin adding participants to the digital real platform around the middle of June 2023. On May 24, the central bank published the final list of CBDC pilot participants. Participants were chosen from a pool of 36 bids made by single companies and consortia, “totaling more than 100 institutions.” The final number of participants is 14; however, some represent groups of companies.

Among the participants are Visa, Santander, and several Brazilian banking institutions, such as Itaú Unibanco, BTG Pactual, and Banco Bradesco. Global tech giant Microsoft and digital technology company 7COMm also comprise one of the 14 participants. In the current phase of the digital real pilot, the central bank will test the privacy and programmability functionalities of its platform through a single use case: a delivery versus payment protocol for federal public securities.

The Brazilian CBDC pilot was officially announced in 2022. The value of the digital real would be pegged against the national fiat currency, the real. It would have a fixed supply and be minted over time. With a population of 214 million, the largest country in Latin America remains an attractive location for global crypto companies.

In January, Binance and Mastercard teamed up to launch a prepaid crypto card in the country. Since March, Coinbase has partnered with local payment providers to offer crypto purchases and enable deposits and withdrawals in the local currency. On May 19, the central bank granted Latam Gateway—the payment provider for Binance in Brazil—a license to operate as a payment institution and an electronic money issuer.

The Brazilian CBDC pilot has drawn significant interest from companies both within and outside the country. It remains to be seen how successful the pilot will be, but the participation of major global companies like Visa and Microsoft is a promising sign for the future of digital currencies in Brazil.

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