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With all the digital evolutions that have been changing the way we deal with our daily lives, the Financial System could not stop in time. We have already modified the way we make payments, transfers, loans, investments and so many other things, the transformation is already happening.
PIX and Open Banking are examples of innovative tools, 100% online, that are revolutionizing the way people handle money. Currency will also be part of this revolution.
In 2020, the Central Bank of Brazil started studies for the implementation of a digital currency in Brazil, the Real Digital.
What is Real Digital?
Real Digital should work as an extension of the physical currency, in which the use will be at the discretion of the Financial System users. The currency will be regulated by the Central Bank and by the General Data Protection Law (LGPD), which makes all banking operations, carried out with the digital real, traceable.
The Central Bank’s idea is to introduce a new functionality in the market, using new technologies to implement a technological and effective tool, always striving for the security and privacy of users.
It is important to emphasize that with the creation of digital currency there will not be the extinction of physical currency, we will continue to be able to use paper banknotes, even after the launch of Real Digital.
Is Real Digital a Cryptocurrency?
The answer to this question is no, Real Digital will not be characterized as a cryptocurrency, since the Central Bank considers cryptocurrencies as cryptoactive, that is, they have attributes associated with a financial asset.
Real Digital will follow economic manuals with its three functions: store of value, unit of account and means of exchange.
Another difference between Real Digital and cryptocurrencies is centralized issuance. While currencies such as Bitcoin are decentralized, in which users participate in the creation and registration of transactions, Real Digital will be issued exclusively by Branco Central.
What are the main advantages of Real Digital?
With the creation of Real Digital, smart contracts , or smart contracts, will be made possible. When making purchases, the question always arises, do you first transfer the money or register the transfer?
With the new currency, both transactions can take place simultaneously, facilitating the entire process of buying and selling.
Another feature that will come with Real Digital is “programmable money”. Little has been disclosed about this tool, but the idea is that the Central Bank can issue the currency with a kind of expiration date, providing an incentive to consumption or reducing inflation.
In addition to the advantages already stated, the emergence of a digital currency enables technological advances, especially with regard to the Internet of Things (IoT).
Maybe we can start thinking about automatic cars using Real Digital to make payments at gas stations.
