News

Nubank to test Brazilian CBDC, Drex

Monday 21 August 2023 14:23 CET | News

Brazil-based financial services platform Nubank has connected its infrastructure to the blockchain network of Banco Central do Brasil to initiate testing with Drex, the Brazilian digital currency.

 

Based on the information detailed in the press release, node connection is the company’s first step within the pilot project of Drex, formerly known as Real Digital, for asset tokenization with the aim of making transfers increasingly simple, safe, and efficient.

Drex pilot project and what Nubank’s integration entails

The start of practical tests as part of Nubank's integration into the pilot project of Drex is enabled by connecting the company’s infrastructure to the Drex blockchain network, which operates on the Hyperledger Besu technology, chosen by the Brazilian Central Bank for transactions.

As highlighted in the announcement, the digital version of Real is set to be an important step for other types of assets, such as automobiles, to have a digital representation on the Drex platform, which is believed to help decrease trading risks and operational costs alike, while also helping simplify the process.

Nubank to test Brazilian CBDC, Drex

When commenting on the announcement, Thomaz Fortes, general manager of Nubank Cripto’s operations advised that Nubank is a blockchain technology enthusiast and believes that the success of Drex has an increased potential to make its customers’ financial operations more simple, safe, and efficient. Per their statement, there is an increased capacity for innovation and evolution of day-to-day operations, such as the transfer of ownership of physical assets.

The press release further highlights Nubank as being one of the 16 financial institutions selected by the Brazilian Central Bank to participate in the pilot project of Drex, with the testing being expected to be completed by the end of 2024. Following the integration of its technological node into the network of the Brazilian Central Bank, Nubank is now enabled to test and simulate transactions with different tokenized financial assets that are part of the pilot, in addition to contributing to the development of solutions to help ensure the privacy and security of the network.

Drex – the Digital Brazilian Real

Monetary authorities and international organisations worldwide are tracking the increased usage of digital assets in financial transactions (tokenization) in recent years, with central banks representing almost the total global GDP studying, exploring, or testing systems for the issuance of central bank digital currencies (CBDC) for different purposes.

The Brazilian Central Bank has been working towards issuing the Brazilian sovereign currency in digital format, having established the guidelines for issuance of the digital Brazilian currency (Guidelines of Digital Brazilian Real, May 2021) based on the results of a working group created in August 2020. 

As detailed on its website, the bank aims to promote the efficiency of financial markets and financial inclusion through the implementation of Drex, whose retail version is set to be provided by a regulated financial intermediary. The Drex Platform is in practice a Distributed Ledger Technology (DLT) ecosystem, in which regulated financial intermediaries are to convert balances of demand deposits and electronic money in Drex, so that their clients have access to various intelligent financial services.

More: Link


Free Headlines in your E-mail

Every day we send out a free e-mail with the most important headlines of the last 24 hours.

Subscribe now

Keywords: partnership, banking, fintech, financial services, paytech, CBDC, digital currency, tokenization, digital assets, DLT, e-money
Categories: Banking & Fintech
Companies: Central Bank of Brazil, Nubank
Countries: Brazil
This article is part of category

Banking & Fintech

Central Bank of Brazil

|

Nubank

|
Discover all the Company news on Central Bank of Brazil and other articles related to Central Bank of Brazil in The Paypers News, Reports, and insights on the payments and fintech industry: