Fabio Araujo, Director of the Central Bank of Brazil, Bitcoin (BTC) praising its technological capabilities, describing this asset as a financial innovation that enables the emergence of new critical products.
“Bitcoin Pioneered Lots of Technologies Like Web3”
As Livecoins reported on Aug. 4, Araujo stated that besides Bitcoin’s role in the emergence of the Web3 concept, it triggered most countries to start researching central bank digital currencies (CBDC).
Interestingly, Araujo explained that the Brazilian Central Bank began studying the properties of BTC more than a decade ago:
“We started doing this in 2009 with the launch of BTC and distributed database technology that facilitated the creation of Web3. Bitcoin brought the Proof of Work solution, something fundamental to Web3’s services to the community.”
“Too Volatile to Use as a Payment System”
However, Araujo dismissed the possibility of using Bitcoin as a currency, citing the volatility of this asset as a major drawback. In this case, the director said CBDCs are needed as they remove the volatility situation and work as a payment solution:
“CBDC, cryptocurrencies Although it uses the technology that supports it, it is not a crypto asset. The CBDC works as a representative of the Brazilian Real in an environment where crypto assets operate. However, the Brazilian Real will not compete with the other listed assets.”
Araujo confirmed that the central bank is investigating the CBDC and concrete results are expected in 2024. It’s worth noting that Araujo is head of the Brazilian central bank’s CBDC program and claims that a pilot project will likely launch in 2023.
*Not investment advice.
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