The Central Bank of Brazil has announced that it will allow 10 commercial banks to participate in its CBDC pilot. The second stage of the central bank digital currency pilot will involve up to 20 participating institutions that will be selected based on their previous experiences with distributed ledger technology (DLT).

It’s also worth noting that only institutions included in the National Financial System Network will be considered for participation. The central bank also revealed that it will cast a wide net when selecting these participating entities even though commercial banks could be prioritised over other types of financial institutions. Payment providers and established fintech firms could be considered for participation as long as they meet the bank’s stipulated requirements.

Specifically, the central bank of Brazil will pay close attention to the size and the international reach of these applying institutions. The central bank will also look into the nature of transactions expected to be simulated in the pilot. The participating entities will bear any expenses and costs associated with the corresponding responsibilities assumed voluntarily.

Without prejudice to the coordination of work by the central bank, each selected participant will designate a technical representative to manage their technical team and conduct the necessary understandings for the development of the pilot CBDC with the central bank and the other participants. More countries are racing to a successful CBDC launch Several other countries from all over the world are advancing their efforts to launch central bank digital currencies, including China, the UAE, Russia, and potentially Canada in the future. In May 2023, France-based bank BNP Paribas has partnered with the Bank of China to promote the digital yuan to corporate clients.

The main aim of the partnership is to allow BNP Paribas China’s corporate clients to link up with the BOC system. This will allow users to manage their digital yuan wallets by connecting them to their bank accounts, tracking transactions, and making payments using China’s digital currency via an e-CNY management system. In April 2023, the Bank of Russia revealed that the digital rouble platform will support interactions with other central bank digital currencies.

The current development of the digital rouble includes various mechanisms designed to facilitate communication with other state-issued digital currencies. Russian lawmakers were informed by officials from the Central Bank of Russia that specific models for CBDC interaction are still being determined and several alternatives are being considered. In March 2023, the Central Bank of UAE has revealed its plans to complete the first phase of its central bank digital currency project in mid-2024.

This new CBDC strategy will include bilateral ties with an Asian country as well as the launch of a proof-of-concept for CBDC issuance. The strategy will include three separate phases that will facilitate the launch of the digital dirham. Canada also launched a public consultation in May 2023 that aims to assess how a digital dollar would fit into the Canadian economy.

The move indicates that Canada is also considering the launch of a central bank digital currency as more and more countries are ramping up their efforts in this space. .