Brazil might secure its economic leadership with the 2024 CBDC
Brazil will create a Central Bank Digital Currency (CBDC) in 2024, which might boost its economic leadership in South America.
Due to macroeconomic unpredictability, outdated technology, and strict monitoring, Brazil’s banking business has traditionally been highly concentrated. The regulator required “bulwarks” to create the local financial system and handle scale.
In recent years, authorities have fostered competition via new laws, sharper regulations, and a better macroeconomic climate. This dynamic, paired with “software eating the world,” lead to the fintech boom.
The Brazilian Central Bank deployed PIX, a 24/7 rapid payments system, in 2020. Today, 122 million Brazilians use PIX, or 57% of the population. 40% of consumers made their first electronic transfer thanks to this innovation, demonstrating the potential for financial inclusion. PIX’s performance made it a standard for several nations, and the Bank of International Settlements applauded it.
Open Finance enables financial organizations to share client data, enabling more tailored product offers. The initiative launched in 2021 with more than 800 financial institutions and 9.6 million consenting clients.
In accordance with the endeavour to promote innovation, the Central Bank of Brazil has already adopted a topic relating to the revolution sparked by cryptocurrencies and blockchain, as it represents the next frontier capable of facilitating better access to financial products for a larger percentage of the population through the tokenization of the Brazilian currency, the digital realm.
The expenses of retail payments in the United States are projected to be between 0.5% and 0.9% of GDP, a number that may be lowered to almost nothing depending on the on-chain solution.