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The Central Bank of Brazil is developing a new digital currency, called Drex, which promises much more than simple transactions. But the big question that hangs in the air is: will this new digital currency be as successful as Pix, the instant payment system that has already conquered the country?
The Drex coordinator at central bank, Fabio Araújo, in a recent interview on Minsait Cast, was sincere in recognizing that achieving Pix's resounding success could be an impossible mission.
“Pix set the bar high,” admitted Araújo. Since its launch, Pix has exceeded all expectations, revolutionizing the way Brazilians make payments.
“No one imagined he would be so successful,” he added, highlighting that Drex, despite its innovations, may not reach the same level of adoption.
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However, the Central Bank is not backing down. Araújo highlighted that the institution is committed to making Drex an essential tool in the lives of Brazilians.
But for this to happen, much still needs to be done. According to Araújo, “Many technological advances need to be made before we can release digital currency to the public.”
Tests with the population, for example, should still take place over the next two years, especially due to privacy concerns.
Privacy, in fact, is one of the biggest concerns surrounding Drex. In a digital asset environment where security and anonymity are crucial, the Central Bank is implementing zero-knowledge proof technology to ensure that complex transactions, such as the purchase of a property or a car, remain private.
“This technology will allow us to ensure that only the parties involved in transactions know the details,” explained Araújo, taking a step forward in protecting user data.
Drex and the promise of a new digital economy
Whether or not Drex will be able to repeat Pix's success, only time will tell. However, the Central Bank is betting big on creating a new digital economy that it will be worth exactly the same as the Real, but being programmable and intelligent money.
Fabio Araújo mentioned that Drex's range of applications goes far beyond the tokenization of investments. “The use of this technology has the potential to reduce risks in complex transactions, such as the purchase of cars or real estate,” highlighted.
One of the great attractions of Drex is the promise of simplifying and automating transactions that would traditionally require the intervention of lawyers or other intermediaries.
“With smart contracts, a code can guarantee the custody of the asset, ensuring that payment and transfer of assets are carried out automatically and securely,” explained Araújo, making transactions safer and more accessible for everyone.
In addition to facilitating complex transactions, Drex also has the potential to make the investment market more attractive and accessible, especially when compared to cryptocurrencies and betting, which have gained popularity in Brazil.
Araújo noted that “Drex can greatly simplify transactions and generate confidence in the exchange of assets, making safe investments more accessible to the population.”
The democratization of the financial market
The Central Bank is not just interested in creating a new digital currency; is also committed to democratizing access to the financial market.
According to Araújo, Drex offers a decentralized and standardized environment, where startups and companies can operate easily, as long as they are authorized by the Central Bank.
This could open doors to a new wave of innovation in the Brazilian financial sector, similar to what Pix did with digital payments.
Araújo also highlighted that Drex has the potential to increase competition and democratize the population's access to new financial services.
“Today, if a startup enters the financial sector, such as the agricultural market, it needs to develop specific technologies to operate in that niche. With Drex, it will be possible to operate in different sectors without the need to create new infrastructure,” he stated, pointing to a future where access to the financial market will be simpler and more inclusive.
But will Drex really be able to dethrone Pix and become the new favorite of Brazilians? Or will it be just another attempt at innovation that will not achieve the same success? Only time will tell. Meanwhile, the Central Bank continues its journey to transform Drex into a centerpiece of the country's digital economy.
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