The Real Digital is a digital currency proposal from the Central Bank of Brazil (BCB), which aims to modernize the national financial system and improve the efficiency of the payments market.
In this context, information security and data protection are key aspects to ensure the reliability and acceptance of this new way of conducting financial transactions using digital currency.
In this article, we will explore the context of the Digital Real, its development stages, and the importance of information protection in the process.
The growing importance of central bank digital currencies on the global stage
In Brazil, the BCB has been following the topic for a few years. In August 2020 it organized a working group to conduct studies on the issuance of a digital currency by the institution.
The group had representatives from all areas of the Central Bank
and counted on the direct involvement of several departments, especially International Affairs, Financial System Monitoring, Banking and Payment System Operations.
Preliminary results were presented to Directorate of the institution, which determined the establishment of a regular forum to discuss the topic with the Central Bank’s technical staff.
The discussions conducted in this forum motivated:
- The publication of the project guidelines in May 2021;
- Holding a series of webinars to discuss the potential applications of the new currency with society;
- The Lift Challenge Real Digital, with the goal of developing technological solutions for the implementation of the new currency.
According to the Central Bank project coordinator, Fabio Araújo,
the Real in digital format will work as a
a Pix
on a large scale
, allowing instant large-value wholesale transfers, such as for large companies and financial institutions.
The road to the development and implementation of the Digital Real in Brazil
The first phase of the project involves the development of a test platform that registers assets of various types and natures.
The platform chosen was Hyperledger Besu, which operates on open source, which reduces costs with technology licenses and royalties.
Hyperledger Besu is compatible with
technology
Ethereum technology
, which is responsible for the architecture used by the Ether (ETH) cryptocurrency and other decentralized applications.
The technology allows tests in controlled environments, guaranteeing the privacy of transactions. BC’s reasons for choosing Hyperledger Besu.
According to the Central Bank, the testing phase will be completed in December 2023
and in March 2024
, if the Hyperledger Besu platform can support the simulated transactions, it will be used to set up the Digital Real.
The goal is to reach Real Digital maturity starting in 2024
The schedule foresees the availability of Real Digital to the population by the end of next year. During the test phase, each participant from the financial sector is to contribute its share of the infrastructure.
In April, the Central Bank will organize a workshop with financial institutions and technology companies to pass on the guidelines. Starting in May, the monetary authority will choose the participants of the pilot project.
With the participants defined, there will be transaction tests with Real Digital in a simulated environment, without real values. The assets to be used in the pilot will be as follows:
- Deposits from bank reserve accounts, settlement accounts, and the National Treasury’s single account;
- Bank deposits on demand;
- Payment accounts of payment institutions;
- Federal government bonds.
The National Treasury will participate in the testing phase to enable the construction of cheaper and more efficient technology for trading government bonds in the primary and secondary markets.
In the simulated operations, a fictitious investor will buy government bonds through the bank’s application that will connect to the test platform.
In addition, the tests will also include the possibility of liquidating loans with long-term investment funds without without disposing of the entire financial application.
Successful implementation of the project can lead to a more inclusive, competitive, and efficient financial system. However, there are still challenges and tests to be carried out to ensure the viability and security of the digital currency.
Eval is tracking Real Digital’s progress
Eval, a reference in technology and innovation, closely follows the progress of Real Digital and foresees a scenario of major changes in the country’s financial sector.
In fact, there is the expectation that the new digital currency will transform the Brazilian financial system, bringing greater efficiency and financial inclusion to the population.
Soon, Real Digital should open doors for the development of new financial services, further expanding the offer of technological solutions in the market.
47 projects were presented, of which 9 were selected to “test” the Real Digital. were selected to “test” the Real Digital, innovative solutions that can be developed based on the Brazilian currency platform in digital format.
It is also worth mentioning, the scenario of collaboration opportunities with the Central Bank of Brazil and other financial institutions in the development and implementation of the Digital Real.
As with PIX, Eval, with all its knowledge and expertise in technology and innovation, can contribute significantly to the project’s success.
Ensuring the safety and security of financial transactions will be key to the success of the Digital Real
With the increase in digital transactions, the need for effective security measures becomes even more important to prevent fraud and data breaches.
In this context, solutions such as the
Hardware Security Module (HSM)
or Data Protection on Demand
DPoD
which in short is an HSM in the cloud, play a key role.
HSMs are physical cryptographic devices that provide an additional layer of security to protect cryptographic keys. When integrated with Hyperledger Besu, HSM can raise the level of Real Digital’s reliability.
By using HSMs in the Real Digital infrastructure, the BCB can ensure that financial transactions are processed with a high level of protection.
This protects both the users and the financial institutions involved, and with it greater confidence in the Real Digital.
About Eval
EVAL has been developing projects in the financial, health, education, and industry segments for over 18 years. Since 2004, we have offered solutions for Authentication, Electronic and Digital Signature, and Data Protection. Currently, we are present in the main Brazilian banks, health institutions, schools and universities, and different industries.
With value recognized by the market, EVAL’s solutions and services meet the highest regulatory standards of public and private organizations, such as SBIS, ITI, PCI DSS, and LGPD. In practice, we promote information security and compliance, increase companies’ operational efficiency, and reduce costs.
Innovate now, lead always: get to know Eval’s solutions and services and take your company to the next level.
Eval, safety is value.
