The Central Bank of Brazil has announced a delay in the completion of the drex pilot, the country’s central bank digital currency (CBDC). This postponement is due to the inefficiency of the privacy solutions presented so far. The new phase of the pilot will begin in July and conclude in 2025, incorporating smart contracts to support use cases proposed by private entities.
Privacy Concerns and Pilot Extension
The central bank highlighted that the primary reason for the delay is the inadequacy of the current privacy solutions. These solutions did not demonstrate the necessary maturity to ensure compliance with all legal and privacy requirements. Consequently, the pilot phase has been extended to allow for new functionalities, including smart contracts, which third parties will implement.
The pilot’s extension aims to broaden the scope of the project, encouraging private entities to propose innovative CBDC projects beyond the original design for drex.
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Ensuring Privacy Compliance
Local reports indicate that the central bank will only conduct tests involving the general population once there is certainty that privacy requirements can be met. Drex is being developed as part of a blockchain system supported by Hyperledger Besu, which adds complexity to compliance with Brazil’s banking and tax secrecy regulations.
Official Statements
Fabio Araujo, the digital real project coordinator for the Central Bank of Brazil, confirmed in June that the privacy issue is critical. He emphasized the need to balance privacy and usability to create practical digital asset products. This requirement makes it impossible to issue and test drex this year.
The central bank reiterated its commitment to ensuring that privacy standards are fully met before moving forward with broader testing involving the general population.
