How will Real Digital change your routine?

Making offline transfers, simplifying the process of buying and selling real estate and facilitating international payments are among the nine projects selected by the Central Bank’s (BC) innovation lab working on Real Digital solutions, which is set to launch in 2024.

Real Digital is a virtual representation of the currency circulating in the Brazilian economy. The project has emerged globally: the growth of cryptocurrencies has encouraged central banks around the planet to develop their own digital currencies.

The first projects were selected through the work of the Lift Challenge carried out by the National Federation of Central Bank Server Associations (Fenasbac) together with the BC that started this month and brings together projects from different institutions, such as Itaú, Santander, Tecban, Visa and Mercado Bitcoin.

Real Digital will have the same value and will be freely convertible into bank deposits, into paper money and used for purchases, bill payments and personal transfers, just like conventional Real. The main difference is that it can have new functions that evolve, expanding applications that are not possible with a real “conventional”.

The intention, according to Rodrigo Henriques, director of financial innovation at Fenasbac, is for proposals to reach the Minimum Viable Product (MVP) stage by the end of the Lift period next February, i.e. a product that delivers what it promises, despite not being complete.

“It’s not a product yet, it’s not released yet, but the feeling is that even though it’s not finished, if I released it tomorrow, someone would benefit. People would say, it can be improved here, there, but it works,” he said.

Two transactions in one

After this period, BC will select projects to advance to a pilot phase that will last until the second half of 2024. The goal is for projects to undergo tests with clients at a reduced scale to validate ideas in a near-real-world environment.

One of the selected is the project presented by Santander, which tries to facilitate the process of buying and selling real estate or vehicles. The premise is to convert the right of ownership into a digital format and through a smart contract enable payment and transfer of property ownership at the same time.

Jayme Chataque, Santander’s executive supervisor of technology and operations, points out that the bank has a relevant market in the real estate and car finance markets and that this project would enable a more efficient transaction of assets.

“For example, you can say that the transaction value of the car will only be available when you change the owner’s name. You turn two parallel transactions into one,” he said.

Another major bank participating in the process, Itaú, is working on a proposal that uses the digital real to facilitate international transfers between Brazil and Colombia. Holders of the currency could exchange currencies at the same time, facilitating the exchange between pesos and reals.

Innovation and new markets

The project by TecBan, the company behind Banco24 horas, aims to create a network of programmable lockers that will serve as secure points for product delivery, as they will only be opened with payments via digital currency that has an exact schedule.

Luiz Fernando Lopes, head of digital platforms at TecBan, explains that the locker communicates with the customer via a smart contract and the user receives a notification that they can pick up the product. In possession of digital currency, when the locker is opened, the amount is credited to the seller’s account. Confidence in online transactions is expected to improve.

“The other thing is that our country still has many places that e-commerce logistics do not deliver, within communities, for example, more sensitive places due to social and security issues. I manage to place these cabinets close to the communities and include this user profile as well,” he said.

A new market that can also benefit from Real Digital is cryptocurrencies, and Mercado Bitcoin is one of those chosen to accelerate its project that seeks to bring more security and efficiency to financial transactions.

Bitcoin Market CEO Reinaldo Rabelo explains that the idea is to create a stablecoin, its own digital currency with a value linked to the Real, and use it to buy real financial assets, such as court orders or claims, without the need for an intermediary, such as a bag, for example.

“On the one hand, I have a stablecoin, which is a token worth 1 real, on the other hand, I have a token (a digital representation of an asset) that is worth part of a certain claim or credit. Our project is actually a link between two types of tokens,” he explained.

One of the international companies selected in Lift, Giesecke+Devrient is of German origin and operates in the field of technology in finance. The project aims to enable money transfer even when both ends of the operation are offline.

According to the company, the transaction would take place using a protocol that would process payments from mutually authorized accounts, and could also be done with cards and “wearable devices,” such as digital watches.

By developing these projects, the Central Bank strives to enable, when launching Real Digital, clients to be ready to offer innovative solutions that facilitate everyday transactions and enable completely new products.

Discover the first projects for Real Digital

haha

The project consists of creating a fund with depositors’ funds (liquidity pool) with a focus on offering loans and ensuring that these operations comply with the laws of the national financial system.

Banco Santander Brazil

By converting the right of ownership of a vehicle or real estate into a digital form (token), the institution intends to enable the transfer of this right to take place simultaneously with payment. The goal is to increase the efficiency of this type of transaction.

February

The work of the Brazilian Federation of Banks aims to enable the transfer of money in the purchase of digitalized financial assets, such as debentures, to occur at the same time as the transfer of ownership rights. The idea is to increase the degree of trust in the transaction, says Leandro Vilain, executive director for innovation, products and banking services at the entity.

Giesecke + Devrient

A German company proposes a payment and transfer system that allows both payer and receiver to be disconnected from the Internet. The created protocol enables transactions between mutually authorized digital wallets and also prevents money loss.

Itaú Unibanco

The idea is to use a payment-versus-payment (PvP) method so that people and businesses can exchange Real for Colombian pesos in a process where the currency transfer takes place simultaneously.

Bitcoin market

In collaboration with Fundação CPQD and Bitrust, Mercado Bitcoin will develop a stablecoin linked to the Real that should facilitate the purchase of financial assets, such as precatory or crypto-assets.

Tecban

Thinking about e-commerce, TecBan develops a solution that combines Real Digital with the concept of the Internet of Things. The idea is to create a network of programmable wardrobes that will be able to receive orders online. The customer will then use the digital currency to pay on the spot and pick up the product.

vert

Associated with Digital Asset and supported by Oliver Wyman, Vert is working on the idea of ​​programmable money for rural financing. It is a concept of resources that are intended for a specific use or that have certain conditions for their consumption. As a result, monitoring and inspection of funding becomes simpler.

Visa from Brazil

In partnership with Consensys and Microsoft, Visa proposes a platform solution that allows small and medium-sized Brazilian companies to interact with the global market and access competitive financing proposals.

Gabriel Shinohara