Brazil is creating its central bank digital currency (CBDC) and the architecture of its system. The Brazilian Central Bank has made strides in laying the groundwork for the operation of the proposed digital real currency, according to Roberto Campos Neto, president of the organization.

Campos Neto announced that the pilot tests for the digital real will begin immediately and that private banks have made significant contributions to the initiative at a presentation hosted by the Brazilian bank BTG Pactual.

Before his term as bank president expires in December 2023, according to Campos Neto, the project's whole development course should be completed. According to the Brazilian CBDC model, each bank will be permitted to create this currency, which will be backed by regulated deposits.

In addition, Campos Neto went into greater detail about his vision for Brazil's future full-fledged digital financial system. The current fiat payments program PIX and the Open Finance programs, which seek to enable smooth bank connections, are also part of Brazil's system, according to Neto, who views the digital real as only another element.

Neto thinks that this technology may transform how personal finance is handled in Brazil right now. As he said: "I think these three things can change the history of financial intermediation in Brazil, transforming our system into something efficient, and today in the world there is no one so advanced."

The plan for these initial tests was laid out by Fabio Araujo, the project's coordinator at the Central Bank of Brazil, on February 6. The primary goals of the pilot testing are to evaluate the level of security that the currency can offer users and whether or not that level of privacy complies with current legal requirements.