Mercado Bitcoin, Stellar partner to work on Brazil’s CBDC

Brazilian exchange Mercado Bitcoin announced a collaboration with the Stellar Development Foundation (SDF) to work on one of the nine projects chosen for the LIFT Challenge Real Digital, created by the Brazilian Central Bank.
Mercado Bitcoin, Stellar partner to work on Brazil's CBDC
Mercado Bitcoin, Stellar partner to work on Brazil’s CBDC

The LIFT Competition Real Digital is a collaborative environment created by the Brazilian Central Bank (Bacen) in collaboration with the National Federation of Central Bank Servers (Fenasbac).

With the introduction of Stellar’s integration, SDF will join the Mercado Bitcoin-led group developing Real Digital solutions, which also includes CPQD and ClearSale.

Denelle Dixon, CEO of Stellar Development, stated that Stellar’s network is ready to assist Mercado Bitcoin and the Central Bank of Brazil as they investigate use cases for the Real Digital’s future. “Stellar was built for asset issuance, and its built-in compliance capabilities provide Mercado Bitcoin with a strong base on which to build a solution with the features Bacen expects to see,” she asserted.

The Stellar network was chosen by Mercado Bitcoin because of its speed, efficiency, and security, according to the announcement.

“We’re part of a group of organizations with the structure and ambition to use blockchain technology to create reliable financial market solutions. Using the Stellar network, we will be able to send a comprehensive case to the Central Bank for review “Mercado Bitcoin CEO Reinaldo Rabelo remarked.

In addition to the Mercado Bitcoin consortium, the Brazilian Central Bank chose the DeFi Aave (AAVE) protocol and ConsenSys in collaboration with Visa and Microsoft to develop use cases for the country’s Real Digital.

The president of Brazil’s Central Bank indicated in April that the country’s sovereign digital currency pilot will go online this year, according to Cointelegraph.

However, this will remain a prototype version that will not be available to the entire country’s population. According to Campos Neto, the Real Digital intends to use the CBDC platform to enable smart contracts and decentralized finance.

“The Real Digital initiative is a response to society’s demand for local methods of settlement in a new environment, as well as the rapid advancement of digital transformation.” in order to achieve significant efficiency gains, “Last year, Campos Neto remarked.

According to Fábio Araujo, the BC’s coordinator for the Real Digital initiative, the central bank wants to enable the building or connectivity of the national financial system with decentralized financing (DeFi) and smart contracts. According to him, the blockchain ecosystem and cryptocurrencies have made significant contributions.

“We seek to put these key features of the crypto ecosystem within our regulatory perimeter in order to conduct a mass thing and give access to more individuals.” We aim to introduce smart contract and decentralized ledger technology inside to reach a larger audience “he remarked.