Lodi Valley News.com

Complete News World

After the tests in China, the central bank is introducing the Brazilian digital currency and studying the model for issuance - 4/18/2021 - the market

After the tests in China, the central bank is introducing the Brazilian digital currency and studying the model for issuance – 4/18/2021 – the market

Shortly after the Chinese government began testing its virtual currency, known as the electronic yuan, Brazil’s central bank announced progress on this issue.

Mayor Roberto Campos Neto has stated that he will bring “news” about “soon” The launch of official digital cashWhich was designed by the Monetary Authority in recent months.

According to the central bank, studies in the region have progressed a lot. The first stage of the timeline for the launch of the Brazilian digital currency was the creation of a working group, in August of last year, to discuss the impacts, benefits and costs of the new monetary model.

Since then, the Basel Convention has been working on issuing a detailed report, with alternatives to implement Virtual money by 2022. At the time, the idea was that the document would be produced within six months, but, according to the Basel Convention, it was not ready yet.

The report will be submitted to the Collective Board of Directors, who will decide whether or not to proceed with the project. The digital currency issued by the monetary authority will be just a new way of representing money in circulation. In other words, it will be part of the country’s monetary base.

The new model was widely advocated by Campos Neto. a BC’s goal is to implement the Pix instant payments systemAnd open banking is that both culminate in the creation of a digital currency.

An open banking system, or open financial system, opens the way for consumers to share their data with other institutions in search of better credit terms and financial products on one platform.

See also  NUBANK introduces 50 BRL in a new card in 2021; See how we do

For experts, in addition to the Covid-19 pandemic, which is advancing the digitalization of the payments movement, China’s progress on this issue should prompt other countries – including Brazil – to accelerate the implementation of their virtual currencies.

“I’m sure about that [a moeda digital chinesa] It will give impetus. With China taking the lead, everyone was provoked to think about it. There is the problem of supply and demand, because it is a project that requires investment. So the discussion is about whether it will be accepted by the population, ”said Eduardo Deniz, professor at FGV (Fundação Getulio Vargas) and technology researcher.

For him, the High commitment to Pix It is an indication that the digital currency will be well accepted by the Brazilian community. The pandemic has accelerated the entire process of digitization and forced people to adapt. It is a process without revenue, so this demand is not decreasing, it is only increasing. “

No country in the world has official virtual money. The government’s issuance of a digital currency, called CBDC (Central Bank Digital Currency), is in the final stages of implementation in China. Earlier this year, Beijing distributed virtual resources, downloaded via cell phones, to residents so that people could test the new resource.

If Brazil progresses quickly with the project, it might be one of the pioneers.

In the United States and Europe, decentralization of central banks can make this process difficult. It can be difficult to reach a consensus on creating virtual money, ”Denise asks.

CBDC will serve as a supplement to the Pix and will be distributed by the financial system, as with physical cash, only digitally.

See also  How can I prevent access to bank apps after my phone is stolen?

I don’t think there will be an expansion in the monetary base [montante de dinheiro em circulação] Just by creating a digital currency. I think that part of what will actually be released on paper money will come out in virtual form. I don’t see any inflationary risks, “asked Andre Gallardo, chief economist at the economic analysis consulting firm.

The difference between official virtual money and cryptocurrencies in the market today (such as Bitcoin) is that the currency issued by BC will be similar to paper money, guaranteed and managed by the state, while there are no guarantees for others.

Additionally, digital money will not have any speculative effect. Crypto assets do not have the basic properties that can be considered a currency. For example, bitcoin is not accepted anywhere. Gallardo said that currencies that are monopolized by the monetary authority are of a coercive nature, that is, people and the market are obligated to accept them and are much less volatile .

For the economist, a digital currency can give more power to monetary policy.

“The big difference in that leadership. In the direct transfer of government resources to the population, as happened with emergency aid, the fact that money can be tracked is very important. In the world, it is being discussed, for example, creating a record with an expiration date. It’s a structural change from It would give more power to monetary policy.

Banknotes and coins are distributed through the banking network, but in paper money transactions, the consumer does not need to have a bank account. In order to use the virtual currency, it must be bank-funded.

See also  Has the FGTS Emergency Draw already got a start date? | Rede Jornal Contábil

The main objective of BC is to reduce the demand for paper money to reduce costs. According to a survey by city officials, in 2019, R $ 90 billion was spent on transportation, storage and cash security, which includes all payments for safe deposits and mandatory security measures.