The source code for the Brazilian CBDC in testing was analyzed by blockchain dev Pedro Magalhães.
Brazil has been developing a CBDC for some time now. If all goes according to plan, the digital Real will be launched sometime in 2024.
Once launched, it would support retail payments for anyone inclined to use it, backing up the payment with funds in the users’ bank accounts.
The Brazilian CBDC would not, however, interfere with other payment methods common in Brazil, such as Pix.
According to a spokesman for the Brazilian government, the decision to push on with the CBDC project was taken in order to open up new avenues for technological improvement. The digital Real could also potentially reduce the cost of credit and other customer-facing financial products, allowing the banks to reach a wider customer base.
“This could reduce the cost of credit, the cost of improving the return on investments. There is a great potential for new service providers, fintech, democratizing access to the market and offering new services.”
Unfortunately, the current iteration of the Brazilian CBDC contains some interesting code that could allow the government to directly interfere with users’ wallets.
Possible Attack on Privacy
Although there is no shortage of CBDC advocates, many in the tech sphere have long been suspicious of government-backed digital currencies. According to critics, a CBDC removes the beneficial aspects of decentralization and anonymity from cryptocurrencies, essentially transforming them into the same abstract figure shown in your bank balance.
Digital currencies would therefore subject to fractional lending and similar practices, with no real incentive for consumers to use them.
Read more: cryptopotato.com