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Fabio Araujo, Director of the Central Bank of Brazil, has praised the characteristics of Bitcoin, saying that it is a financial innovation that uses new technologies. For Araujo, Bitcoin was the catalyst for what is now known as Web3. At an event, Araujo also commented on the status of the development of the digital reality, stating that his organization hopes to add smart features to the currency.
More and more central banks around the world are working on the issue of cryptocurrencies and how to innovate to keep pace with these technologies. Fabio Araujo, director of the Central Bank of Brazil, praised Bitcoin as a financial innovation that gave rise to the Web3 movement and talked about how the digital real, the central bank digital currency (CBDC) still under research, could have programmable functions.
In an event promoted by the Sao Paolo Business School, Araujo stated:
We began to accelerate this in 2009, with the launch of Bitcoin, with distributed database technology facilitating the creation of the Web3. The Bitcoin application brings the Proof of Work solution, which is a fundamental thing for the services that Web3 brings to the population.
Furthermore, Araujo noted that this technology preceded Ethereum, which includes smart contracts that provide more possibilities to the financial system.
Araujo also touched on the topic of digital reality, hinting at the possibility of it having smart capabilities. In a set of slides presented at the event, the central bank’s digital currency is shown as linked to Web3 elements such as digital assets, tokens, internet of things (IoT) protocols and offline payments.
The central bank’s director also made a clear distinction between the digital real and other crypto-assets such as bitcoin. Araujo stated:
Although CBDC uses the technology that supports crypto, CBDC is not a crypto asset. CBDC is an expression of Real in the environment where cryptocurrencies operate, in the same way that Real does not compete with listed assets.
Araujo explained that the digital reality was an opportunity to bring smart features to bridge the existing gap between traditional finance and Web3 protocols. While the bank has done various experiments with the concept of digital reality, the decision to launch or scrap this project will be made in 2024.
What do you think of Brazil’s central bank’s stance on Bitcoin? Tell us in the comments section below.
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