Is the digital real Brazil's cryptocurrency? Find out everything!
The digital real, which is still in the study phase, can become a reality in the daily lives of Brazilians.
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Due to the increase in the number of online payment systems, many people no longer use physical money to make purchases. And this trend is expected to grow even more, with the creation of digital versions of national currencies, such as the digital real.
But will it replace physical money? When will people start using it? Keep reading and find out everything about it!
What is digital real?
The digital real is a virtual currency issued by the Central Bank of Brazil.
The BC's objective is to make this currency part of people's daily lives, being used by those who use bank accounts, cards and even cash.
This new version of the currency will facilitate the development of new business models that increase the efficiency of payments.
Furthermore, it is very likely that new technologies will be implemented, such as the Internet of Things (Internet of Things) and programmable money.
The digital real is part of a new monetary category: central bank digital currencies, known by the English term CBDC (Central Bank Digital Currency).
Instead of printing more money, the Central Bank will generate a code equivalent to its amount.
So far, there is no specific date for the digital real to start working.
What is a CBDC?
CBDC is the virtual version of a country's currency, used to make purchases, set the value of a product, among other purposes.
Currently, most financial transactions are already carried out digitally. However, the difference is that at the moment, cash notes and coins are the only way for the Central Bank to issue physical money.
But with the creation of a CBDC, it would be possible to issue currencies in digital format, putting into circulation currencies that were not printed.
Is Brazil creating its own digital currency?
In fact, Brazil is not developing its bitcoin.
Although CBDCs and Bitcoin are both part of the digital environment, there are some important differences between them.
This is because a digital currency issued by the central bank, as the name suggests, is regulated by a country's monetary authority.
This means that all decisions relating to it are centralized in an institution responsible for managing a country's financial system.
Cryptocurrencies, such as Bitcoin and Ethereum, are not issued by a government or central bank. It is the users themselves who regulate this system.
Furthermore, it is important to remember that CBDCs work in the same way as traditional money, which you already use to make purchases and pay bills.
Which countries have a CBDC?
Currently, the most advanced country in relation to this issue is China.
There are more than 20 million Chinese people with digital wallets issued by the People's Bank of China.
This way, they can use digital currency to carry out common financial transactions.
The Chinese CBDC operates through a private blockchain network managed by the country's government.
This means that only authorized people have access to it, which makes the system extremely secure.
The Chinese government's goal is to replace, or at least reduce, the use of cash to make payments.
The expectation is that in 2020, the Chinese CBDC will be available to its entire population.
Will physical money disappear?
In Brazil, the objective is not to completely replace the use of cash.
The digital real will be another alternative payment method, just like many others that are already part of our daily lives.
In fact, it is not even possible to convert all physical money to the digital world, as this could cause a collapse in the country's financial system.
Furthermore, it is important to remember that even with all the technological development of recent years, millions of Brazilians still do not have banking services or access to the internet.
Certainly, if all physical money migrated to the digital world, these people's lives would be even more difficult.
This fact is certainly also an obstacle to converting all physical money into digital real.
What are the main advantages of the digital real?
Technology is increasingly present in our daily lives.
For this reason, the development of a currency like the digital real will bring several benefits to Brazil.
Among the main ones, we can mention the efficiency and ease of the payment system.
Although cash is accepted in most places, many people prefer to use debit cards, credit cards and other online payment systems, such as Pix, for example.
It is also important to remember that issuing digital real will be cheaper than issuing physical money.
After all, this way, it is possible to reduce costs with transportation, printing and storage.
Of course, for this process to happen efficiently, the Central Bank will need to invest in security.
Will it be possible to carry out international transactions with the digital real?
The Central Bank has already commented on the importance of keeping the system open to the possibility of adopting international standards.
But in addition to all the issues involving technological development, it will also be necessary to modernize tax legislation to make this process more agile.
How does the real digital security system work?
Those responsible for this area of the Central Bank state the existence of a “privacy directive”.
This ensures that the data under the responsibility of the BC will not be used inappropriately.
Regarding hackers and virtual attacks, the BC states that it is managing to deal with these situations very well.
Conclusion
Digital currencies will undoubtedly become increasingly popular in the coming years.
The goal is not to eliminate cash, but rather to create yet another completely virtual payment alternative.
