One of the economists at the Central Bank of Brazil, Fabio Araujo, recently stated that the monetary authority of the country would have far greater control over the money of the population once the CBDC rolled out. This was revealed in a paper that was published recently by the Bank for International Settlements.
Through this Real Digital, the central bank will have the ability to halt several bank runs and impose multiple restrictions on citizens’ access to money. Real Digital, which is the digital version of the national currency of Brazil, has already been debated at the central bank since 2015 and will go through its first tests in 2023. The tests would be conducted through nine different solutions that were presented by private companies during the recent Lift Challenge event that was carried out by the CBB.
CBDC Could Help The CBB Impose Restrictions
Interestingly, Cointelegraph then went on to report on the value of the upcoming CBDC which would be pegged against the STR- which is the national fiat payment system. This has also been called the Reserve Transfer System. Through the application of Real Digital, the central bank says it would be enabling the so-called smart payments within a highly regulated environment. Smart payments usually include smart contracts, multiple transactions with the Internet of Things devices, and several applications of decentralized finance.
In the document published by BIS, Araujo stated that the main objective of bringing out a CBDC is to help entrepreneurs with a reliable and safe environment in which to innovate through the usage of programmability technologies that could make smart payments a reality.
Araujo concludes the document by stating that the CBDC for the country, Real Digital, by enabling smart contracts and programmable money solutions in the financial environment in Brazil, will actually help in the creation of customized financial services.