The news: Brazil's central bank launched a CBDC pilot focused on wholesale transactions with a full rollout expected by the end of 2024, per Reuters. Brazil hopes the digital real will help make financial services more accessible.
What's the appeal? CBDCs blend the best features of fiat and digital currencies. Payments benefit from fiat's stability, but blockchain technology can make transactions faster and cheaper.
CBDCs can also democratize the payments market. Transactions that previously were too expensive for anyone except banks to conduct—like repo operations—can be completed with CBDCs instead. Fintechs and service providers can use CBDCs to make the payments market more competitive and to offer new services.
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