one of several real digital Central bank digital currency (CBDC) trials have demonstrated the use of a Brazilian CBDC on a public blockchain. The pilot, jointly led by crypto exchange Mercado Bitcoin and Stellar blockchain, simulated delivery-versus-payment (DvP) transactions, in which asset and money were exchanged simultaneously, as reported by Economic value.

The test was part of the RAISE Challenge, the Central Bank’s CBDC essay, which explores possible use cases for the digital real with nine consortia. while most Participants are institutions, two cryptocurrency organizations were selected to run these tests, including DeFi firm Aave Labs.

“Our thesis was to demonstrate that it is possible, viable and safe to carry out transactions with digital assets using a representation of the real in public networks”, said Fulvio Xavier, head of special projects at Mercado Bitcoin. “The Central Bank is always concerned with understanding what happens when transactions leave its hands,”

The central bank’s digital real was used as a reserve asset to back a stablecoin in what appears to be the model for payment institutions. Around the world, most retail CBDCs are distributed through banks, but remain a central bank liability. Economic value stated that the design in Brazil is for merchants to use bank deposit tokens instead of CBDC. In other words, most retail users will not have money backed by the central bank. This looks like a wholesale CBDC with broader access than conventional central bank money.

In addition to Mercado Bitcoin, eight more teams are participating in the Brazil LIFT Challenge, including G+D and Visa, which won the Global CBDC Challenge 2021. Last year, a rural finance trial was carried out by VERT, Digital Asset and Oliver Wyman, working on automating the loan application process and demonstrating that programmable money can ensure money is spent properly. according to a recent statement by Roberto Campos Neto, president of the Central Bank, it seems that Brazil will enter the pilot phase imminently.