Brazilian CBDC development: Mercado Bitcoin partners with Stellar

Mercado Bitcoin, a Brazilian exchange, has announced that it will be partnering with the Stellar Development Foundation (SDF) in order to develop one of the nine projects selected for the LIFT Challenge Real Digital. As promoted by the Central Bank of Brazil, the LIFT Challenge is a joint environment of blockchain and finch companies to develop solutions for a Brazilian central bank digital currency (CBDC).

Stellar Development Foundation CEO Denelle Dixon commented on the partnership, saying that Stellar’s network is prepared to support both Mercado Bitcoin and the Central Bank of Brazil as they work together to explore the future of the country’s digital Real and use-cases thereof. She noted:

“Stellar was designed for asset issuance, and its built-in compliance tools give Mercado Bitcoin a strong foundation to develop a solution with the features that Bacen expects to see.

As part of the partnership statement, the Brazilian exchange stated that Stellar’s network was chosen owing to its speed, security, and efficiency, ticking all three boxes. There are numerous other blockchain projects available, but for Mercado Bitcoin, the Stellar network serves the best for its development purposes. CEO of Mercado Bitcoin Reinaldo Rabelo commented:

“We are in a consortium of companies that have the structure and ambition to build robust solutions for the financial market through blockchain technology. Utilizing the Stellar network will allow us to deliver a complete case for evaluation by the Central Bank.”

As well as Mercado Bitcoin – and the Stellar Network – the Central Bank of Brazil is also working with the Aave, a decentralised protocol, ConsenSys, Visa and Microsoft to develop, test, and explore the use-cases of a national digital currency for the bank. According to Campos Neto, the president of Brazil’s Central Bank, a digital Real for Brazil can be expected to be piloted later this year. Neto noted in 2021 that there is a growing need to embrace innovation in finance, saying that a CBDC forms part of this:

The Real Digital initiative is a response to the rapid progress of digital transformation and society’s demand for native means of settlement in a new environment. conditions for important efficiency gains to be achieved.