The president of Brazil's central bank said a digital real is likely coming in 2022.
In an interview with Bloomberg TV, Roberto Campos Neto told editor Erik Schatzker that a central bank digital currency (CBDC) will be the culmination of other efforts to modernize Brazil's banking system. Brazil is one of a number of central banks worldwide pursuing projects in this area.
Neto said a previously strong central bank leadership created space for innovation as he stepped into the bank presidency in 2019. That led to the BC# Agenda, which is a packet of policies aiming to modernize the Brazilian financial system and promote competition. Part of this agenda includes an instant payment system which Neto said the bank anticipates will be live in November. This, along with other policies to promote competition, Neto said will create an "open banking system" in Brazil.
"It's actually going to be more like what we call now the open finance system," he told Bloomberg.
These efforts are already under way, according to Neto, and ahead of phase one.
While a CBDC is on the horizon, Neto said it'll be the effect of a number of aspects of the agenda coming together. The country needs to bolster the real and change perspectives on currency before going digital. This includes "internationalizing" and making the real a convertible currency.
"I think the digital currency is not the cause, it's the consequence. For you to have that, you have to have in place a system of instantaneous payments that is efficient and interoperable, you need to have an open system in which you can create competition, and you need to have a currency which has credibility, is convertible and is international. Then I think you have all the ingredients to have a digital currency," Neto remarked.
Nothing has changed from the original expected timeline related to the agenda, according to Neto. He said the bank expects to have all the ingredients in the next two years.
A 2022 launch date could coincide with the launch of a digital yuan from China. Earlier this year, the PBOC announced that a digital yuan could be ready for use during the 2022 Winter Olympics.