Brazil’s central bank announced on Monday the launch of a digital currency pilot project aimed at replicating the success of its instant payment system Pix to popularize financial services in the country.

Fabio Araujo, the central bank’s coordinator for the project, said public use of the digital currency should begin by the end of 2024, after a testing phase (including the buying and selling of federal public bonds between individuals) and subsequent evaluation.

Araujo said the central bank digital currency would be built as a retail financial service with a payment method executed on distributed ledger technology (DLT) and settled through tokenized deposits of Brazilian financial and payment system institutions.

Furthermore, bank deposits will continue to exist in the Brazilian CBDC, just registered in a more modern environment, meaning financial institutions will not lose this source of funds for credit generation. (Reuters)