Brazilian Central Bank Unveils New Digital Currency: The Drex
In a similar move to Russia, the central bank of Brazil has unveiled its central bank digital currency (CBDC) this week. The Banco Central do Brasil (BACEN) announced the new name and visual design for the digital version of the Brazilian real.
Brazilian Digital Currency Gets a New Identity
Along with a fresh look, the CBDC project of the Brazilian central bank has been given a new name: the drex. Each letter in the name represents a specific aspect of the digital currency and its characteristics.
1. The “D” and “R” – Digital Real
The first two letters, ‘d’ and ‘r’, refer to the previous name of the Brazilian CBDC, the “digital real.” This signifies the digital nature of the currency.
2. The “E” – Electronic
With the letter ‘e’, the word “electronic” is highlighted, emphasizing the digital nature of the currency.
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3. The “X” – Linked to Brazil’s Payment System “Pix”
The last letter ‘x’ is associated with the Brazilian payment system called “Pix,” which is connected to over 700 financial institutions in the country. This represents the integration of the new digital currency with the existing payment infrastructure.
New Logo and Symbolism
The logo of the drex portrays two arrows in the letter ‘D,’ representing a transaction. This symbolizes the evolution from traditional fiat money to the new digital version of the Brazilian real. The transition from blue to light green colors in the logo signifies the completion of a transaction.
The letter ‘x’ in the logo also signifies modernity and connectivity through the use of distributed ledger technology (DLT), such as blockchain. This highlights the innovative and secure nature of the digital currency infrastructure.
Unique Feature in the Brazilian CBDC
Last July, blockchain developer Pedro Magalhães discovered a peculiar feature in the source code of the Brazilian digital currency. He found a function in the coding that could potentially allow the central bank to freeze the digital currency.
This discovery raised concerns, and the central bank of Brazil confirmed the existence of this function but did not disclose whether it would be present in the final version. However, the central bank did state that the underlying architecture of the digital currency is subject to additional changes.
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It is worth noting that Russia also unveiled its CBDC logo this week. The digital currency of Russia, the digital ruble, features a coral-red circle incorporating the international symbol of the Russian ruble.
The introduction of the drex, the new digital currency of Brazil, marks a significant milestone in the country’s financial system. With its own unique features and symbolisms, Brazil is poised to adopt a modern, secure, and innovative form of digital currency that aligns with the global trend towards CBDCs.