Brazil's Central Bank is planning to launch a digital currency or CBDC in 2024. This statement was directly conveyed by the president of the central bank, who stated that this digital asset could drive participation and become a more effective economic strategy.

The President of Brazil Central Bank, Roberto Campos Neto, recently announced the central bank's plans to launch the Central Bank Digital Currency in 2024 at the Press Conference. He also said that the bank is currently implementing a pilot program.

The aim is that this plan can conduct a pilot program alongside other financial institutions before implementing CBDC. He also said that using this currency would bring more benefits because it would drive participation.

He said: "I think this digitized and integrated system will help a lot in developing and including people in the financial world. The digital currency has greater inclusion, lower cost, reduced barriers to entry, and more, and this is needed in the economy in Brazil."

Brazil Can Secure Status as the Economic Leader Thanks to the 2024 CBDC Move

The CBDC development plan carried out by Brazil is a familiar thing globally. If the goal is successful, Brazil's Central Bank will join countries such as China, Bahamas, and Nigeria, which were successful in CBDC first.

In general, there are many countries currently conducting research regarding targets and plans for launching CBDCs. However, the program launched by the Brazilian central bank concerns financial institutions, and this project has a tokenized deposit.

Campos Neto also said that representatives from the IMF had contacted the central bank and provided feedback regarding the proposed model. It was also stated that this is the easiest way to implement, and the central bank should pay attention to it.

"In the end, we are sure that thoughts regarding systems from other central banks can be thought of. These existing deposits are also related to the audit system and funding costs," said Campus Neto.

For nearly a decade, Brazil has been planning legislation to change the country's monetary situation; the historical perspective has also led to macroeconomic volatility, while technology and concentration have been considered unavoidable.

Previously, in 2020, the Central Bank of Brazil launched PIX, an instant payment infrastructure service that works 24/7 and adopts chart movements. PIX has also received a good response from the people of Brazil, with almost 60% of the citizens using this service.

Thus, this is one of the primary considerations for the Brazilian central bank to launch this digital currency. Financial products such as digital currency would be a sufficient infrastructure, but the Central bank says that this money will debut only in 2024.

Fiscal Expansion Is Not the Right Strategy, and Inflationary Risks are Still High

Brazil's plans to work on launching a digital currency have cleared up with the arrival of the IMF to advise. However, this project seems to have yet to be focused on because Brazil is still focusing on fiscal expansion.

It is stated that the digital currency model is something innovative. But if you look at the fiscal stimulus, this seems very significant considering the short-term effects of inflation. The budgetary expansion strategy is no longer considered a strategy that will work out.

Meanwhile, it can be seen that Brazil's economy shrank in October. This is believed to have something to do with the rate hike carried out by the Brazilian central bank some time ago. Meanwhile, Brazil's next finance minister said the fiscal expansion would not work.

Brazil's economy is now on edge. But to look at the fiscal development and the economy of the Latin American country, it is believed that the digital currency property is the most impactful. Brazil Central Bank is now preparing a digital currency to be launched in 2024.