Central bank of Brazil forms a team for studying crypto

By: Ali Raza
Ali Raza
Ali plays a key role in the cryptocurrency news team. He loves travelling during his spare time and enjoys playing cricket,… read more.
on Aug 25, 2020
Updated: Jan 26, 2021
  • Brazil's central bank recently revealed the existence of a new group dedicated to studying crypto.
  • The bank remains skeptical of the idea of launching the coin, although it did recognize numerous benefits.
  • The central bank has not made its decision yet, but it noted that it might not do so despite the benefits.

The cryptocurrency craze that has taken over central banks around the world has started taking a firm grasp in South American countries. According to recent information, the central bank of Brazil has now also developed a strong interest in digital currencies.

So much so, that the bank revealed the existence of a newly formed group dedicated to studying the crypto industry.

Brazil might get its own CBDC

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According to the bank’s statement, online payments have been growing sharply in Brazil over the course of the last several years. With more people developing interest in online payment solutions, a new need for more functional solutions has emerged, as well.

Developing its own CBDC, digital real, already presents a number of benefits, such as reducing the cost of issuing and maintaining banknotes and coins. Brazil is already spending a fortune — around 90 billion reals, or $16 billion USD — every year just to ensure that there is always a functional supply of adequate paper money in circulation.

In fact, the bank noted that the amount spent on this purpose alone sits between 1% and 2% of the nation’s entire GDP.

It has yet to determine how much it would be saved by issuing digital currencies, and the total scope of its impact on Brazil’s economy. However, it also stated that it may not issue one if the findings are not beneficial enough.

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Digital real is not a certainty

Even if the newly formed group does approve of the idea of a native coin, the central bank might still not issue a cryptocurrency of its own. This was confirmed by the bank’s official, Rafael Sarres de Almeida, who added that the study’s only real purpose right now is to help the bank provide a response for the country’s society on the topic.

However, the fact is that South American countries are already more than willing to accept crypto. Argentinian economic crisis, for example, already led to a surge of Bitcoin usage. There is also Venezuela, that has seen huge use of crypto, and has been trying to encourage the use of its native coin, Petro, for several years now.

You can study cryptocurrency here.

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