Microsoft and Visa Set to Participate in Brazil CBDC Pilot

Microsoft will be participating in the forthcoming pilot project for Brazil’s central bank digital currency (CBDC). Banco Central do Brasil, the country’s central bank, plans to onboard participants onto the digital real platform starting in mid-June 2023.

On May 24, the central bank released the final roster of participants for the CBDC pilot. The participants were selected from a pool of 36 proposals submitted by individual companies and consortia, with a combined total of over 100 institutions. The final count of participants is 14, although some represent groups of companies. For instance, one of the 14 participants consists of Microsoft, the US-based tech giant, Banco Inter, a Brazil-based bank, and 7COMm, a digital technology company.

Alongside Microsoft, other participants include Visa, Santander, and several Brazilian banking institutions like Itaú Unibanco, BTG Pactual, and Banco Bradesco.

Brazil CBDC to Rest for Privacy and Functionalities

During the current phase of the digital real pilot, the central bank will assess the privacy and programmability features of its platform using a specific use case: a delivery versus payment protocol for federal public securities.

The official announcement of the Brazilian CBDC pilot took place in 2022. The digital real would be pegged to the national fiat currency, the real, maintaining a fixed supply and gradual minting over time.

With a population of 214 million, Brazil, as the largest country in Latin America, continues to attract global cryptocurrency companies. In January, Binance and Mastercard collaborated to introduce a prepaid crypto card in the country. Since March, Coinbase has partnered with local payment providers to facilitate crypto purchases and enable deposits and withdrawals in the local currency. On May 19, the central bank granted Latam Gateway, the payment provider for Binance in Brazil, a license to operate as a payment institution and electronic money issuer.