On August 7, the Central Bank (BC) announced the new Brazilian digital currency, the Drex. Scheduled to be launched by the end of 2024, the Drex will be a fully digital version of the Real and will represent a convertible and adaptable payment tool for everyday transactions.
The name “Drex” is formed by the initials of its fundamental characteristics: D: Digital R: Real E: Electronic X: Symbolizes modernity and connection, following the idea of Pix, the instant transfer system.
The Drex will not be accessed directly by account holders but rather through virtual wallets linked to financial institutions, such as banks. It will be used for purchasing real estate, vehicles, public securities, functioning as an extension of Pix, but with different purposes and value scales.
Although it shares blockchain technology with cryptocurrencies, the Drex significantly differs from them. Issued by the BC, the digital real will literally represent Brazilian money, adhering to the same policies as physical money. Its difference lies only in the platform, replacing paper with blockchain.
In tests since the beginning of the year, the digital real is expected to be available only at the end of 2024. The BC has enabled 16 consortia to develop tools to be tested in the new system, with tests scheduled to start in September.
Security is a primary concern with the new system, and the BC has created cyber measures to ensure that all transactions are secure. Consumers should be aware and follow the guidance of their banks, avoiding any transactions outside official channels.
The BC highlights that the Drex will facilitate everyday transactions and open a safe and regulated environment for the generation of new businesses. This represents a significant step in the digitalization of the economy and offers an opportunity for more democratic access to the benefits of this transformation.
The announcement of the Drex is an important milestone in Brazil’s financial trajectory, promising a smooth transition to a more digitalized future. The adoption of a digital currency in the Brazilian financial system is a notable landmark, promoting greater efficiency in transactions and potentially expanding access to financial services.