Few months after holding a meeting with Ripple, Brazil’s central bank is considering the issuing of a Central Bank Digital Currency, a memo by the apex bank has shown.
In May, Ripple’s Brad Garlinghouse held a meeting with the Central Bank of Brazil where “institutional matters” were top of the discussions.
The bank on its website says it had a close conversation with the Ripple CEO during which president Roberto Campos Neto conversed with Garlinghouse and some three other representatives from the firm.
While the center of discussion was made shady to the public, the financial institutions says “institutional matters” was the focus of the meeting.
Ripple is planning to coast Brazil’s remittance industry. In June 2019, Ripple launched an office Sao Paulo purposely to offer the RippleNet potentials to banks and other financial institutions in the country and in Latin America at large, considering that Brazil is among the top country with a high remittance flow. The country’s remittance flows is said to be around $2.5 billion.
Already, Ripple showed readiness in collaborating with banks in the country and has partnered with three important institutions in the country, namely, Santander, Bradesco, and Banco Rendimento. The three makes use of RippleNet with Banco Santander launching One Pay FX, a remittance app subsistent on the RippleNet.
Now, the Central Bank of Brazil is considering the issuance of digital currency. The bank says CBDC may be used to possibly improve the country’s current model of commercial transactions.
To get the future of financial relations right, the Central Bank says it formed a working group to weigh the impact of CBDC issuance in Brazil.
The committee will check the scope of a CBDC and its benefits to the country. The committee will look into how the digital currency can usher in complementary benefits to the society especially with the implementation of Pix, an instant payment system that will begin operation in November.
China is taking the lead in CBDC, the country has perfected its central bank digital currency and some selected banks across the country are making use of it despite been in the pilot stage.