•Central Bank of Brazil to test security and transaction privacy levels of the Digital Real
•Pilot tests to be conducted later this year
•Tests will focus on determining levels of privacy and security with proposed CBDC infrastructure
Central Bank of Brazil to Test Security and Transaction Privacy Levels of the Digital Real
The Central Bank of Brazil will be conducting a series of tests later this year to determine the levels of privacy and security that can be achieved with its proposed central bank digital currency (CBDC) infrastructure. The institution announced that it would be running a simplified operation in order to transact with a still-to-be-determined tokenized asset. Fabio Araujo, the coordinator for the digital real project at the Central Bank of Brazil, explained that these tests are focused on examining if the transaction information leakage derived from the system is compatible with current regulatory requirements.
The tests described by Araujo will start after the current laboratory phase of the digital real, which is part of an open project called LIFT challenge, involving various organizations. After delivering their final project reports on April 25th, institutions and banks participating in this challenge will then participate in a pilot test which will feature an introduction to another unselected tokenized asset for transactions. This expanded test environment will be opened up for institutions and banks in 2024.
Objectives Behind Tests
The objective behind these pilot tests is to check both security and privacy levels within this proposed architecture. It will also allow third parties such as banks, who can issue their own tokens backed by the digital real, to interact with this system more effectively.
LIFT Challenge Participation
The LIFT challenge has attracted nine different proposals aiming to include the digital real as part of economic endeavors. Institutions taking part in this challenge must deliver their final project reports by April 25th before they can proceed with these pilot tests thereafter.
Digital Real Launch Date
While there is still no confirmed launch date for when these pilot tests will begin or when exactly it could become available for public use, it is expected that it should happen sometime during 2024 following further testing being completed successfully throughout 2021.