Why Mercado Bitcoin and Stellar Are Exploring Brazilian CBDCs


According to press release, the Stellar Development Foundation (SDF) is collaborating with the main exchange platform, Mercado Bitcoin. Partners work on 9 cases of the Brazilian Central Bank (Bacen) LIFT Challenge.

Read Related | Nigeria upgrades CBDC for wider use due to crypto restrictions

This initiative was distributed in conjunction with other Brazilian institutions. It aims to explore the launches and use cases of Central Bank Digital Currency (CBDC).

The Stellar Development Foundation will work with Mercado Bitcoin, ClearSale and CPQD. These partners are made up of the LIFT Challenge consortium.

According to the announcement, the Financial and Technological Innovation Lab of the Real Digital Challenge (LIFT) Challenge will operate as a collaborative environment to develop Real Digital, Brazil’s CBDC.

This project identifies the technical feasibility, use cases, and infrastructure needed to bring Real Digital to market. The initiative also aims to improve Brazil’s financial system by attracting market participants, banks, payment institutions, tech companies and more.

These entities will be responsible for product development based on Real Digital. Brazil’s central bank claims the CBDC will be deployed in the second half of 2022, and has announced that the first phase will be “trials with a limited audience.”

Mercado Bitcoin CEO Reinaldo Rabelo said of the initiative:

We are part of a consortium of companies with the structure and ambition to build robust solutions for financial markets through blockchain technology. Leveraging the Stellar network can provide a complete case for evaluation by central banks.

the self-defense force cooperation with the Ukrainian government At CBDC for several years. The non-profit organization and its partners started testing the programmable capabilities of CBDCs, but lacked updates on the project.

Why did Mercado Bitcoin choose Stellar as their partner?

Similar to the Ukrainian CBDC, Real Digital will be launched to promote payment innovation and make the Brazilian financial system more open and inclusive. Denelle Dixon, CEO of the Stellar Development Foundation, has argued that cooperation with Mercado Bitcoin will contribute to the growth of the network.

She added:

Stellar’s ​​network stands ready to support Mercado Bitcoin and Brazil’s central bank as they explore use cases for the future of Real Digital. Stellar is designed for issuance of assets and its built-in compliance tools provide a strong foundation for Mercado Bitcoin to develop solutions with the functionality Bacen expects.

Mercado Bitcoin chose the Stellar network because of its functionality and believes that it is “excellent for tokenization and payment projects implementation”. The network can process fast and cheap transactions, financial institutions can implement their own KYC policies, and are not considered “energy intensive”.

Read Related | SWIFT Tests CBDC Interoperability to Enable Cross-Border Payments

As of this writing, the price of XLM has been flat over the past 24 hours at $0.13.

XLM is trending down on the 4-hour chart. source: XLMUSDT TradingView

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