Brazil CBDC Tracker

CBDC Information

Economic Information

Monetary Base

$214,622,978,310

Cash Issued

$69,546,946,180

GDP

$1,920,100,000,000

Country Information

Freedom Rankings

Cato and Fraser Human Freedom Index:

6.92/10

Freedom House Index:

7.2/10

Reporters Without Borders Freedom Index:

5.86/10

Brazil is in the pilot phase. The Banco Central do Brasil announced that it had launched a pilot project in March 2023, expanded it in July 2023, and plans to conclude it in late 2024.

CBDC History and Development

In May 2021, the Banco Central do Brasil released a set of CBDC design guidelines. Among the 10 guidelines, it was noted that Brazilian CBDC must be programmable, usable offline, not interest-bearing, compliant with anti-money laundering laws, and used in retail payments.

In 2023, the Banco Central do Brasil changed the name of the CBDC to Drex. Since then, the Banco Central do Brasil has described Drex as “the [Brazilian] real in digital format.” The central bank explained: “The letters ‘d’ and ‘r’ refer to Real Digital, the ‘e’ comes from electronic and the ‘x’ brings the idea of connection, associated with the technology used. … All elements reinforce the idea of agility of the Central Bank's digital currency, Drex.”

In March 2023, the Banco Central do Brasil announced that “The Drex Pilot is the testing phase for operations with the Brazilian digital currency, Drex, previously called Real Digital.” The pilot involves authorized institutions only simulated end users. The pilot involves 70 firms. The Central Bank of Brazil claims that the Drex Platform operates on distributed ledger technology where “regulated financial intermediaries will convert balances of demand deposits and electronic money in Drex, so that their clients have access to various intelligent financial services.” A separate document detailed the different aspects of the pilot. For instance, the Banco Central do Brasil “will evaluate the benefits of programmability and guarantees of privacy that can be brought by the Drex Platform, developed based on the open-source platform Hyperledger Besu.”

Human Rights and Civil Liberties Concerns

Brazil is considered free in Freedom House’s 2023 Freedom in the World report—earning a 72 out of 100. However, there are still many problems within the country. When it comes to the issuance or use of a CBDC, however, the most relevant issue currently experienced is the persistence of government corruption. A CBDC could worsen this issue.

“Corruption and graft are endemic in Brazil, especially among elected officials,” according to Freedom House. The existence of pervasive corruption is a major concern with CBDCs because it calls into question any promises that might be made by the government to limit surveillance, control, or other risks of CBDCs. Furthermore, the existence of corruption calls into question whether CBDC policies might be designed to exert political favoritism through subsidies, price controls, or other targeted restrictions.

For additional information on concerns regarding violations of human rights and civil liberties, see the following reports by Amnesty International, Financial Tyranny Index, Freedom House, Human Rights Watch, Privacy International, and the U.S. Department of State. For additional information on concerns regarding the risks of CBDCs, see the following webpage and report by the Cato Institute: The Risks of CBDCs and Central Bank Digital Currency: Assessing the Risks and Dispelling the Myths.

For additional information regarding metrics, the methodology page explains each of the data points and provides their respective sources.