The Central Bank of Brazil (Bacen) Opens Up GitHub for the Digital Real Industry
github.com
github.com
The mission statement in the website:
" As CBDCs podem melhorar a eficiência do mercado de pagamentos de varejo e promover a competição e a inclusão financeira para a população com pouco ou nenhum acesso a serviços bancários. "
translating: CBDCs can imporive eficiency in retail payment market and inclusion of population of none of little access to bank services.
But Brazil alread gave a big step a few years with the pix. This days anyone can open a free bank acccount in 10 minutes via their phones, and pay everything ditaglly. Your just scan a QR code, or send money using the person phone number as a key.
To mee, this seens like a attempt to remove paper money from the market and increase tax collection.
That's not a bad goal tbh, but why couldn't they continue to support the Digital Wallet/e-Banking industry instead then? Would CBDCs compete with NuBank? What differentiates it from Pix?
Like I said in other comment. Its a precursor to the comeback of the CPMF.
Also it had the potential to deanonimize all transactiosn you make. I dont wanna the goverment knowing everywhere I spend my money.
"Araujo said the "digital real" will be built as a means of payment executed on distributed ledger technology (DLT), to support the provision of retail financial services settled through tokenized deposits in institutions of the financial and payment systems in Brazil ... Araujo stressed that the concept of the Brazilian central bank digital currency (CBDC) was not intended to leverage digital payments, as this is already being done on a large scale with Pix, which was launched at the end of 2021 and has been widely adopted in Brazil."
This appears to be a trial to streamline back office retail banking operations in Brazil. The example they seem to stress is democratizing federal bond sales within Brazil as well as Repo operations.
The Cashless Society article in Wikipedia gives good insights [1].
It was a tax you had to pay 0,38%.everytime you would move money and pay for somethin. It was collected in the source, and was a cascade tax because it was charged in every step of the logistic chain, including the sale for the final consumer.
Because of the way the tax was created (contribution insted of a tax or imposto in portuguese), this means by law the money need to be destined to a specific target (public health). But because the goverment would use it to balance its accounts insted of invest in the public helth system it was extinct in 2007.
But ever since then, the return of this tax is the wet dream of every govement that came in power, and in the last 2 theres been serious talks to tax digital transactions in a type of new CPMF. And thats what wores me when the goverment start talking about abolishing paper money.
Important untaxed exceptions were pension income, "wage earner" income and stock trading (this last one always baffled me).
> this means by law the money need to be destined to a specific target (public health). But because the goverment would use it to balance its accounts insted of invest in the public helth system it was extinct in 2007.
CMPF funding could only be used by healthcare, pensions and social welfare.
Universal healthcare systems are expensive.
Brazil (and any other country, really) universal healthcare system needed and had a reasonably big budget that was paid basically by CPMF alone, so all the other combined taxes and contributions paid for everything else. The government, by law, could not "move" the funds to anything else.
The reason it was extinct is because it was a direct tax over wealth translation of "the establishment"/"the banked class" - around that time more that 60% of Brazil was unbanked and therefore not directly affected.
Now that Brazil no longer has a contribution specifically destined to healthcare and pensions, both it's universal healthcare system and pension system are in a much worse state.
Not just taxes, complete control. You can have your funds locked if you're a protester, critical of certain politics, maybe run campaigns the government doesn't agree with, or dissent in any way.
The government can control what you are and aren't allowed to spend money on. They can control times/days/dates you are/aren't allowed to spend.
Sure, maybe this isn't their goal right now, but history has proven that over time the government will abuse any inch you give them to exert more control over you.
Another guy (a Lisp-Haskell friend) runs a low level programming outfit which was implementing some interesting proofs of concept (they had no bandwidth for a collaboration a few months ago), I wonder if this has any relation.
Taking rumors at face value, this puts introduction 2-3 years away.
Does anyone have any insights?
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I'm surprised by the inclusion of smart contracts. Perhaps the term just seems dirty to me due to crypto, but with central bank backing this could actually go somewhere.
Into a deeper ditch
It's interesting that the local press isn't talking about this. But then, I guess the hype on cryptocoins died completely by now. I wonder if systems like that can be federated to create bridges so that PIX-like systems over the world talk to each other.
There is a federated system that works world over (SWIFT). It is also decades old.
That one system that works is expensive, slow, and not very secure. The fact that it's still there, and it still have those features is a clear reason why something different is needed.
$0.3 per payment within a country
$5.0 per international payment
I don't think that's expensive. And it is open to all banks and certain other financial institution.
The fact that the primary criticism against central bank currencies comes almost unanimously from people who consider straight up tax evasion a good thing is starting to change my mind.
Evading taxes levied by legitimate and democratically elected governments is unjust.
The discussion is hypothetical about an all-encompassing CBDC, which could take away the gray market and hinder tax evasion. Brazil is not in that situation, since the CBDC is just another payment method among others, most importantly physical cash. If you want to see an authoritarian society you should rather look to China, where they are developing their social credit system.