Transformation from physical to digital is happening fast, but Brazil will take a gradual approach towards digitizing their national currency.
Top Economy Going Digital
Brazil has confirmed a shift to digital in announcing a Central Bank Digital Currency (CBDC). The Director of the Central Bank of Brazil (CBB), João Manoel Pinho de Mello, advanced talks forward about the adoption and transition to a digital currency.
On Thursday, July 29, Director Mello expressed his opinions at a virtual round table event about digital currencies promoted by the CBB. Mello explained how Brazil could achieve the conditions needed for a CBDC within three years or as early as 2022. With this transformation, Brazil can be a vanguard in the Americas for digital adoption.
“I have no way of predicting here exactly how the currency will be perceived by citizens in the future or how the population will use it in their daily lives,” Mello predicted. “But it is possible to say that in the long term, there will be a significant migration from paper money to digital forms.”
A Cautious Approach
As significant world economies recognize the need and potential of digital currencies, Brazilians themselves have increasingly adopted crypto this year, with record numbers at the start of 2021. The country has seen crypto adoption surge amidst institutional recognition, from the first Bitcoin ETF in Latin America to several non-fungible fan token creations with Brazilian football teams.
Mello believes that CBDCs will allow greater security and inclusion within the financial system. However, he still sees the risks of cryptocurrency. He confirmed that the CBDC of Brazil would come gradually and in a way that allows the regulator to assess the risks and benefits of this innovation.
“Cryptoactives, like Bitcoin, do not have the characteristics of a currency, but of an asset. The Central Bank’s opinion on crypto-assets remains the same: these are risky assets, not regulated by the Central Bank, and should be treated with caution by the public,” Mello warned Brazilians.
There is an economic transformation happening quickly, and Brazil is positioning itself to prosper from it. Money as we know may not last much longer with recent shifting towards the digitization of national currencies.
It remains to be seen if Brazilians will be receptive, but there is time for Mello and his team to build and market their product. As Brazil staggers through the pandemic and faces an uphill battle through corruption and economic revival, digital currencies and assets provide the best avenues for citizens to travel.
Source : bsc.news
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