Brazil’s largest crypto exchange is joining forces with the Stellar Development Foundation (SDF) to help in the development of a Central Bank Digital Currency (CBDC).
Developing A ‘Minimum Viable Product’
The task at hand is to develop a minimum viable product (MVP) as a part of the country’s CBDC efforts. Mercado Bitcoin, which is the largest crypto exchange and digital platform not only in Brazil but in all of Latin America, announced on May 24 that it had joined hands with the SDF to contribute to the country’s CBDC efforts. The MVP, in this case, would be a CBDC solution functional enough to meet the minimum requirements set by the Central Bank of Brazil.
The CEO of Mercado Bitcoin, Reinaldo Rabelo, stated that the company is focusing on meeting the parameters set for evaluation and then further approval of a Brazilian CBDC.
“We are in a consortium of companies that have the structure and ambition to build robust solutions for the financial market through blockchain technology. Utilizing the Stellar network will allow us to deliver a complete case for evaluation by the Central Bank.”
Multiple CBDC-related studies and investigations are currently underway, as many central banks believe that they capture the crypto magic without the risks via the CBDC vehicle. Recently, even SWIFT, the global financial messaging service provider, announced that it is conducting CBDC-related tests for cross-border payments involving cryptocurrencies.
Stellar Supporting Mercado’s Efforts
The Stellar Foundation revealed further information that the project being undertaken is one of nine projects promoted by the Laboratory of Financial and Technological Innovations (LIFT) of Brazil. With the support of the Central Bank of Brazil and the National Federation of Central Bank Servers Associations (FENASBAC), all nine projects will be working on different aspects contributing to the development of the final CBDC – the Real Digital.
According to the SDF CEO, Denelle Dixon, Stellar will be exploring different use cases for the CBDC and can therefore extend the expertise they gain to Mercado Bitcoin in the development of a blockchain product to direct the CBDC.
“Stellar was designed for asset issuance, and its built-in compliance tools give Mercado Bitcoin a strong foundation to develop a solution with the features that Central Bank expects to see.”
Stellar, an open-source network for currencies and payments, has drafted a clear roadmap for the year, including bringing smart contracts into the Stellar ecosystem.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Amara is a graduate in Business Management, and has been following the world of crypto since 2019. Having a keen eye for detail, Amara enjoys finding breaking stories via Twitter, official press releases and website blog posts. Outside of crypto, Amara enjoys rock climbing, dancing and spending time with her siblings.