On May 24, Mercado Bitcoin, Latin America’s largest cryptocurrency and digital asset platform, announced a collaboration with the Stellar Development Foundation (SDF) to help create Brazil’s CBDC.
Mercado Bitcoin will work on one of the nine projects promoted by the Laboratory of Financial and Technological Innovations of Brazil (LIFT), which was created to develop a “minimum viable product (MVP)” for a CBDC that meets the goals of the Brazilian government, according to an official post shared by the Stellar Foundation.
In this situation, a “Minimum Viable Product” would be a CBDC solution that is functional enough to meet the Central Bank of Brazil’s minimum requirements, thus giving the best possible product with the least amount of effort.
The Central Bank of Brazil (BC) and the National Federation of Central Bank Servers Associations backed the project (Fenasbac). Furthermore, all initiatives will focus on diverse use cases for the Central Bank of Brazil’s planned CBDC.
A number of well-known financial institutions compete with Mercado Bitcoin, including Visa, Microsoft, Aave, and ConsenSys. Brazil is attempting to establish a CBDC based on the development of significant financial and technical brands.
Brazil’s Central Bank Governor, Roberto Campos Neto, has stated that the CBDC might be deployed in the second half of 2022. However, similar to the CBDC in Europe, they will initially roll out a pilot version before becoming public.
He also said the CBDC would be priced using the STR (Reserves Transfer Method), which is “a system that liquidates all assets (in Brazilian Reals) and is guaranteed by the Real.” He also mentioned that using the Central Bank’s CBDC platform, banks will be able to create stablecoins on their deposits, as well as allow smart contracts and DeFi solutions.
