Mercado Bitcoin (the largest cryptocurrency and digital asset marketplace in Latin America) announced on May 24 its partnership with Stellar Development Foundation SDF to help develop Brazil’s CBDC.
According to a Stellar Foundation post, Mercado Bitcoin will be working on one of nine projects promoted and funded by the Laboratory of Financial and Technological Innovations of Brazil. This project was created to create a “minimum viable Product (MVP),” which would allow a CBDC to meet the government’s goals.
A “Minimum Viable Products” would be CBDC solutions that are functional enough to meet the Mimium requirements of the Central Bank of Brazil. It basically provides the best product possible with the minimum effort.
The Central Bank of Brazil (BC), and the National Federation of Central Bank Servers Associationss (Fenasbac) supported the project. All projects will also focus on different uses cases of the CBDC that will be issued by Brazil’s Central Bank.
Mercado Bitcoin hopes to meet the expectations of the Central Bank of Brazil.
Reinaldo Rabelo is the CEO of Mercado bitcoin. He stated that the company plans to use Stellar’s Blockchain technology to create robust solutions. This should suffice to satisfy all requirements for future approval and evaluation of the Brazilian CBDC.
“We are part of a consortium that has the structure and ambitions to create robust solutions for the financial markets through blockchain technology. The Stellar network will enable us to present a complete case for the Central Bank’s evaluation.
Stellar Development Foundation CEO Denelle Dixon said that Stellar is open to exploring different uses cases for the Real Digital (the Brazilian CBDC) in the future. This partnership will enable them to assist Mercado bitcoin in the development of a Blockchain product that could change Brazil’s approach to money.
“Stellar was created for asset issuance. Mercado Bitcoin’s built-in compliance tools give Mercado Bitcoin a solid foundation to create a solution that has the features Bacen expects to find.”
The development of large technology and financial companies will be the foundation of the new CBDC.
Mercado Bitcoin is competing with a few established names in finance such as ConsenSys, Visa, Microsoft and Aave. Brazil wants to establish a CBDC that focuses on the development and maintenance of technological and financial brands.
Roberto Campos Neto (Brazil’s Central Bank Governor) recently stated that the CBDC could launch in the second half 2022. They will, however, be first launching a pilot version, just like the European CBDC.
He also indicated that the CBDC would be priced according to the STR (Reserves Trans System), which “liquidates all assets (in brazilian reals) and is guaranteed the Real.” Furthermore, he said that banks will be able issue stablecoins on deposits, and that smart contracts and DeFi solutions will be possible through the Central Bank’s CBDC platform.
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