The Central Bank of Brazil announced on Monday (August 7) its plan to adopt a virtual currency by the year 2024. This digital counterpart of the Brazilian real will be called “Drex” and will have a value equivalent to the physical money currently in circulation.
According to the bank, each letter in the term “Drex” symbolizes a distinct facet of this innovative tool. The “D” stands for “digital,” the “R” represents “real,” the “E” means “electronic,” while the “X” incorporates modernity and connectivity. It also echoes the final letter of “Pix,” an instant payment system established in Brazil in 2020.
Drex will greatly facilitate the lives of Brazilians. “This solution, previously referred to as ‘Digital Real,’ will establish a safe and regulated environment, fostering new businesses and offering a more inclusive way for citizens and entrepreneurs to take advantage of a digital economy,” the bank said in a statement.
Transactions
Drex differs from cryptocurrencies, which are characterized by price volatility linked to market dynamics. Drex, on the other hand, will maintain a fixed value equivalent to the Brazilian real. Each 1 real will correspond to 1 Drex. The Central Bank will ensure the stability of this digital currency, diverging from cryptocurrencies, which do not have the backing of any monetary authority.
Standing out as a wholesale currency rather than retail, Drex will not be accessed directly by individual account holders. Instead, it will be available through virtual wallets connected to authorized payment institutions, such as banks and financial intermediaries. Users will deposit real currency into these digital wallets, allowing them to conduct transactions with the digital version of the currency.
Tests
Although in the testing phase since the beginning of the year, the digital real is only expected to be available to the Brazilian population by the end of 2024 or early 2025.
Source: Agência Brasil
Original Text: https://bit.ly/443gKdA