Brazil’s central bank is pushing forward with the development of its central bank digital currency (CBDC), Drex—formerly known as the digital real—by incorporating decentralized finance (DeFi) principles into the project. This innovative approach seeks to address key challenges in decentralization, privacy, and programmability, areas where traditional financial systems have struggled to find balance.
A “Multidimensional” CBDC Vision
On Oct. 3, Roberto Campos Neto, president of Banco Central do Brasil, shared insights into the country’s CBDC ambitions during a presentation for Markus’ Academy on the future of financial intermediation. He emphasized Brazil’s goal of creating a CBDC that addresses the “trilemma” of decentralization, privacy, and programmability—a trio of benefits that are difficult to achieve simultaneously in traditional financial systems.
Neto outlined that Brazil’s Drex CBDC would introduce tokenization directly into banks’ balance sheets, enabling greater financial innovation. “We wanted to have three dimensions of benefits that you cannot get on just a normal CBDC,” Neto explained, highlighting Brazil’s approach of integrating tokenization as part of its CBDC infrastructure.
Open Finance and Nationwide Tokenization Efforts
Alongside Drex, Brazil is advancing its Open Finance initiative, which will act as a marketplace offering various banking and payment options, including the CBDC itself. This platform is designed to foster competition among financial institutions, ultimately benefiting consumers by offering them a broader range of financial products and services. Through this ecosystem, Drex aims to blend DeFi elements with traditional banking systems, bringing decentralized finance into Brazil’s regulatory framework.
