One of the largest crypto companies in Brazil is collaborating with Stellar to create and develop a CBDC
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Answer One of the largest crypto companies in Brazil is collaborating with Stellar to create and develop a CBDC
Mercado Bitcoin, the largest cryptocurrency and digital asset trading platform in Latin America, announced its partnership with the Stellar Development Foundation (SDF) to co-develop a CBDC digital currency in Brazil.
According for post Official from the Stellar Foundation, Mercado Bitcoin will work on one of nine projects promoted by the Brazilian Financial and Technological Innovations Laboratory (LIFT), which was created to develop a Minimum Viable Product (MVP) CBDC which It meets the objectives of the Brazilian government.
The Minimum Viable Product (MVP) is for this case to be a CBDC solution that is functional enough to meet the tradition requirements set by the Central Bank of Brazil, providing the best possible product with minimal effort.
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The project was supported by the Central Bank of Brazil (BC) and the National Federation of Central Bank Server Associations (Fenasbac).
In addition, all the projects will focus on the different use cases of the upcoming Central Bank of Brazil digital currency to be issued by the Central Bank of Brazil.
Mercado Bitcoin expects to meet the expectations of the Central Bank of Brazil:
Reinaldo Rabello, CEO of Mercado Bitcoin, stated that the company expects to build robust solutions using Stellar blockchain technologies, adding:
This should be sufficient to meet all the criteria required for the evaluation and future approval of a CBDC.
We are a group of companies with the structure and ambition to build robust financial market solutions through blockchain technology.
Using the Stellar network will allow us to submit a complete case for evaluation by the central bank.
Denelle Dixon, CEO of the Stellar Development Foundation commented:
Stellar is ready to explore the different use cases of the Brazilian CBDC future.
As such, this new partnership will allow Mercado Bitcoin to help develop a blockchain product that could change the way Brazil handles money.
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Stellar is designed to issue assets, and its built-in compliance tools give Mercado Bitcoin a solid foundation to develop a solution with the features the central bank expects to see
Mercado Bitcoin’s competitors include a few well-known names in the financial industry, such as Visa, Microsoft, Aave and ConsenSys.
This means that Brazil is looking to create a central bank digital currency based on the development of major financial and technological brands.
Roberto Campos Neto, the governor of the Central Bank of Brazil, recently said that a CBDC could be launched in the second half of 2022, and a beta version would be rolled out first before the public launch, adding:
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The CBDC will be priced on the basis of the STR (Reserve Transfer System) which is a system that liquidates all assets (in Brazilian Reals) and is secured by the Real.
Additionally, he noted that through this new system, banks will be able to issue stablecoins on their deposits and enable smart contracts and DeFi solutions through the central bank’s CBDC platform.
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