• The Central Bank of Brazil will be conducting tests to examine the privacy and security levels of its proposed CBDC infrastructure.
• The tests will focus on determining if the system is compliant with regulatory requirements.
• The test environment will feature a tokenized asset transaction and will be open to banks and institutions in 2024.
Central Bank of Brazil Tests Security & Transaction Privacy Levels of Digital Real
Pilot Test Phase
The Central Bank of Brazil is accelerating the digital real project, getting close to its pilot test phase. Fabio Araujo, the coordinator for the project at the bank, explained that security and privacy would be two of the most important areas examined during these tests. Later this year, a simplified operation involving a still-to-be-determined tokenized asset will be conducted in order to determine if transaction information leakage from the system is compatible with current regulatory requirements. This pilot phase follows after a laboratory phase which was part of an open project called LIFT challenge which attracted nine proposals aiming to include digital real into economic endeavors.
Test Details
The test described by Araujo will begin after the final project reports are due on April 25th as part of LIFT challenge. However, it should be noted that this pilot phase will involve only limited scope and participants exchanging information in order to assess degree of security and privacy that can be achieved with system’s architecture. Furthermore, third parties such as banks will also have opportunity to interact with system by issuing their own tokens backed by digital real currency when expanded test environment opens up in 2024.
Objectives
The main objective behind these tests is for Central Bank of Brazil and Brazilian Securities Commission to examine how third parties could interact with proposed CBDC infrastructure while ensuring compliance with current regulatory requirements regarding transaction privacy and security levels.
Conclusion
Overall, these tests conducted by Central Bank of Brazil later this year aim to ensure reliable performance for proposed CBDC infrastructure while also providing secure transactions for all involved parties within regulated framework set out by Brazilian securities commission.
