Bitcoin is praised for its technical qualities by the head of Brazil’s central bank

Bitcoin and its underlying technology have earned the trust and praise of some of the most notable figures in banking and finance.

For example, the director of Brazil’s central bank has only good things to say about the technical characteristics of the crypto.

According to central bank governor Fabio Araujo, Bitcoin is a major “financial innovation” that has given rise to important new technologies and products.

Araujo highlighted the cryptocurrency’s role in paving the way for the development of the Web3 concept and in stimulating research and other studies on central bank digital currencies (CBDC).

Bitcoin’s smart features

During a recent event, the central bank governor also discussed the changing landscape of digital currency, adding that one of the organization’s primary goals is to add intelligent features to Bitcoin.

Araujo revealed that the country’s central bank began investigating the functions of cryptocurrencies more than a decade ago.

“In 2009, with the introduction of Bitcoin and distributed database technology promoting the development of Web3, we began to accelerate this process,” he said.

“The Bitcoin program provides the Proof-of-Work (PoW) solution, which is essential for Web3’s population-based services,” Araujo pointed out.

Image: Stratfor

Web3 in layman’s terms

Web3 (sometimes referred to as Web 3.0) is the third generation of web technologies. The Internet, often referred to as the World Wide Web, is the internet’s foundational layer, supporting a variety of websites and application services.

In 2014, Polkadot creator and Ethereum co-founder Gavin Wood used the term “Web3” to refer to a “blockchain-based decentralized online ecosystem.”

The concept of Web3 gained momentum in 2021. Special attention increased at the end of 2021, primarily due to the investments of bitcoin advocates and prominent technologists and companies.

Image: CryptoSlate

Meanwhile, Araujo ruled out the use of Bitcoin as a currency, noting the asset’s volatility as a significant drawback. In this case, the central bank governor indicated that CBDC is necessary as it eliminates the volatility scenario and acts as a payment solution.

Despite leveraging the technology that underpins cryptocurrencies, CBDC is not a crypto-asset, he said.

In the same way that Real does not compete with listed assets, CBDC is an expression of Real within the ecosystem where cryptocurrencies work, Araujo noted.

The Brazilian crypto market is booming

The Brazilian market for Bitcoin and the broader cryptocurrency sector is expanding rapidly. It is expected that 10 million Brazilians currently own cryptocurrency.

The second largest city in Brazil, Rio de Janeiro, is actively participating in the global municipal race to attract Bitcoin.

In January of this year, the city declared that 1 percent of its treasury would be held in cryptocurrency and that it was exploring the potential of giving tax rebates to individuals who paid in Bitcoin.

BTC total market cap at $460 billion on the daily chart | Source: TradingView.com

Featured image from EF English Live, Chart from TradingView.com