Central Bank of Brazil Invites Applications for CBDC Pilot

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The Central Bank of Brazil opened applications on October 14 for companies to participate in the second phase of its digital currency (CBDC) pilot, Drex.

From October 14 to November 29, firms can submit proposals to contribute to the project to enhance Brazil’s financial system through tokenization.

Brazil Central Bank announced that the next phase will expand beyond the initial consortiums, as 13 complex use cases have already been approved. The new phase introduces more complex use cases, such as loans backed by custodial assets, carbon credits, agribusiness bonds, and foreign trade transactions.

According to a Valor report, this expansion follows the initial phase, during which 16 consortiums, most of them bank-led, tested the registration of the Brazilian real in a decentralized digital network. The project also explored tokenized federal government bonds.

The Central Bank has expressed interest in adding more participants and exploring advanced technology applications. Applicants will also continue testing privacy solutions, as previous efforts have yet to resolve the challenge of securely hiding transactions between participants on a scalable level.

In the previous phase, no company—among Zether, Starlight, Rayls, and ZKP Nova—resolved the issue of scalable transaction privacy.

At a recent event in Rio de Janeiro, João Pedro Nascimento, president of the Brazilian Securities and Exchange Commission (CVM), emphasized that tokenization is a permanent business model and that the crypto industry must operate in a “regulatory-compliant”