Microsoft and VISA Join Brazil’s CBDC Pilot Project

Brazil is part of the BRICS alliance and the region has been working on the development of a wholesale and retail CBDC project for some time now. To this end, some of the top market players are taking an interest in the upcoming CBDC pilot event in the South American nation.

The project is underway under the supervision of the Brazilian Central Bank. Media outlets have reported that several local and global bigwigs are partnering with the CBDC pilot. Meanwhile, Banco Central do Brasil has started to recruit new participants for its digital real platform.

The pilot is set to go live in June this year. The Central Bank has published a detailed list of CBDC pilot participants this week. These participants were selected from a list of 36 bids. Each of these bids consisted of a consortium of various companies.

The shortlisting process involved vetting through more than 100 commercial applicants. However, only 14 top bidders made the final cut. Among these participants, there are also noteworthy international conglomerates such as Microsoft.

At the same time, some native Brazilian firms such as Banco Inter and 7CoMm will be working alongside the international tech giant.

Local Banks also Participate in CBDC Pilot

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Other noteworthy companies that are added to the list consisted of international payments giant Visa and a UK-based bank named Santander. At the same time, various local banks operating in Brazil such as BTG Pactual, Itau Unibanco, and Banco Bradesco are participating.

The pilot phase will test the programmability and privacy functions of the CBCD during the pilot phase. However, the focus will remain on the singular utility of testing its efficiency for transactions and as a Federal public securities payments protocol.

The finalization of the pilot was announced in 2022. The CBDC will operate as the digital alternative for the native legal tender.

Central bank officials have decided to keep the total supply fixed. New CBDC units are to be minted over time. Brazil is the 7th largest country in the world by population and top in the same aspect among Latin American nations.

Brazilian banks worked with Binance and Mastercard in January to introduce a prepaid crypto payment card. On the other hand, Coinbase is also operating in the region as a payment facilitator that allows Brazilian crypto investors to conduct crypto trades using Brazilian real.

This month Central Bank of Brazil approved Latam Gateway as an e-money service. The service enables local payments for Binance exchange in Brazil.

Economists and financial experts are divided concerning the global impact of BRICS nations launching a CBDC. Some lean towards de-dollarization while others dismiss such a probability based on the market share size of USD in the international trade markets in comparison to total BRICS participation.

However, Dr. Anil Sooklal has claimed that BRICS and G20 may outshine the G7. He maintained that more nations are lining up to join the BRICS initiative every week.

He shared a list of the latest sovereign nations that are venturing to become members with Bloomberg. The list includes nations such as Bangladesh, Afghanistan, Bahrain, Egypt, Zimbabwe, Mexico, UAE, Saudi Arabia, Thailand, Turkiye, Iran, and Kazakhstan among others.

However, the key nations in the alliance namely India and China have political differences, and other Asian nations that may need serious diplomatic input to ensure the strength of the emerging economic alliance.

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