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Brazil's Central Bank .......Scales up its Blockchain adoption and integration


The officials of Central Bank of Brazil has hinted of the bank's plan to integrate Blockchain technology to improve operations and processes. 

Members of the central bank's blockchain team revealed they are resuming work with R3's Corda distributed ledger platform, months after ceasing development because the technology was deemed too "immature."

After the enterprise blockchain consortium launched version 1.0 of Corda in October, the central bank said it's ready to see if the newest version has what it takes to back up aspects of the country's financial infrastructure.

And with that, Banco Central do Brasil is now developing proofs-of-concept (PoCs) on four different platforms, trialing ethereum, JPMorgan's Quorum and Hyperledger Fabric alongside its Corda work.

The PoCs broadly focus on using blockchain to both back-up the central bank's current real-time gross settlement system (RTGS), called the Brazilian Payment System, as well as better align the organization with the growing momentum for central banks to innovate using blockchain technology.

Speaking to that trend, the deputy head of the central bank's IT department, Aristides Andrade Cavalcante Neto, said:

"We are a central bank, and we enjoy a lot of stability. But you have to think change. You have to think in a different business model. So, for us, that's the most difficult part of this kind of work when we're talking about innovation."

While the blockchain team at Brazil's central bank had considered a number of use cases – including enabling foreign trade in local currencies and an identity management system – as far back as January, it ultimately selected RTGS as its focus, according to the team's analyst Jose Deodoro De Oliveira Filho.

Instead of being netted periodically, RTGS is used to allow banks to settle their large-value debits immediately as they occur. Because these transactions are relatively infrequent, they have been identified by multiple central banks as a potential use case for blockchain.

Banco Central do Brasil processes 314,000 transactions per day, moving a total of 839 billion Brazilian reals, or about $255 billion by today's exchange rate.

Details about the project are "kind of a secret right now," according to De Oliveira, but he said more information should be forthcoming in the "next couple of months."

The central bank is increasingly open regarding its blockchain development.

Not only did it introduce its findings at the Central Bank Summit hosted by Ripple in New York last month, but also it has also presented its work to the International Monetary Fund, and will, later this month, appear at Blockchain Summit 2017 in Sao Paulo, Brazil.

As other central banks from all around the world, including Hong Kong, Japan, Canada and Europe, are typically in attendance at these events, Cavalcante Neto noted that the meetings had been very useful, to understand the different perspectives from different central banks about the technology.

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