On May 24, Mercado Bitcoin, the largest cryptocurrency and digital asset platform in Latin America, announced its partnership with the Stellar Development Foundation (SDF) to participate in the development of Brazil’s CBDC.
According to an official post share by the Stellar Foundation, Mercado Bitcoin will work on one of the nine projects promoted by the Laboratory of Financial and Technological Innovations of Brazil (LIFT), created to develop a “minimum viable product (MVP)” for a CBDC that meets the goals of the Brazilian government.
A “Minimum Viable Product” is this case would be a CBDC solution functional enough to be satisfy the mimium requirements set by the Central Bank of Brazil, basically providing the best possbile product with the least possible effort.
The project was supported by the Central Bank of Brazil (BC) and the National Federation of Central Bank Servers Associations (Fenasbac). In addition, all projects will focus on different use cases for the upcoming CBDC to be issued by the Central Bank of Brazil.
Mercado Bitcoin expects to meet the Central Bank of Brazil’s expectations.
Reinaldo Rabelo, CEO of Mercado Bitcoin, said the company expects to build robust solutions using Stellar’s blockchain technology. This should be enough to meet all the parameters required for the evaluation and future approval of the Brazilian CBDC.
“We are in a consortium of companies that have the structure and ambition to build robust solutions for the financial market through blockchain technology. Utilizing the Stellar network will allow us to deliver a complete case for evaluation by the Central Bank.”
Denelle Dixon, CEO of Stellar Development Foundation, said that Stellar is prepared to explore the different use cases for the future Real Digital (the Brazilian CBDC). As such, this new partnership will allow them to help Mercado Bitcoin in the development of a blockchain product that could potentially change Brazil’s way of dealing with money.
“Stellar was designed for asset issuance, and its built-in compliance tools give Mercado Bitcoin a strong foundation to develop a solution with the features that Bacen expects to see”
The new CBDC will rely on the development of large financial and technology companies.
Mercado Bitcoin’s competitors include a handful of established names in the finance industry, such as Visa, Microsoft, Aave, and ConsenSys. This means that Brazil is looking to create a CBDC that counts on the development of major financial and technological brands.
Roberto Campos Neto, Brazil’s Central Bank Governor, recently said that the CBDC could be launched in the second half of 2022. However, like Europe’s CBDC, they will be rolling out a pilot version first before a public launch.
In addition, he indicated that the CBDC will be priced based on the STR (Reserves Transfer System), “a system that liquidates all assets (in brazilian Reals) and is guaranteed by the Real.” In addition, he pointed out that through this new system, banks will be able to issue stablecoins on their deposits and enable smart contracts and DeFi solutions through the Central Bank’s CBDC platform.