BCB announced that it received 52 projects in the first cycle of the regulatory sandbox. The Strategic Committee for the Management of the Regulatory Sandbox (CESB) is analyzing the projects and BCB expects to choose 10 projects in the first cycle; the results are expected to be released on September 23, 2021. Additionally, BCB released general guidelines for the Brazilian Central Bank Digital Currency or CBDC.
BCB has been promoting discussions, internally and internationally, for the possible development of a central bank digital currency that may keep up with the dynamic technological evolution of the Brazilian economy, enhance the efficiency of the retail payment system, foster new business models and other innovations based on technological advances, and favor participation of Brazil in regional and global economic scenarios, thus increasing efficiency in cross-border transactions. Post a preliminary assessment and discussions within the working group on CBDC, BCB has set out the guidelines for the potential development of a Brazilian digital currency, which are divided into three categories: functioning, legal guarantees, and technological premises.
The guidelines stipulate that, before the digital currency can be issued, the legal framework must be adjusted to give BCB the necessary powers to operate this new form of currency, thus ensuring the legal security of operations. The extent or nature of these adjustments cannot yet be determined. Compliance with bank secrecy and the General Data Protection Law (LGPD) and other applicable provisions is also a consideration. BCB states that the guarantee of mechanisms to prevent money laundering, terrorist financing, and the financing of the proliferation of weapons of mass destruction is another requirement for a Brazilian CBDC. Having the ability, in the fulfillment of court orders, to track illegal transactions carried out using the digital real is of fundamental importance for BCB. For cross-border payments, it is essential to keep the local system open to the possibility of adopting internationally agreed standards, seeking interoperability solutions with central banks in other countries. Additionally, resilience to cyber-attacks must be compatible with that adopted in the critical infrastructure of the Brazilian financial market.
Related Links (in Portuguese)
- Notification on Regulatory Sandbox
- Press Release on CBDC Guidelines (in English)
- Notification on CBDC Guidelines
Keywords: Americas, Brazil, Banking, Regulatory Sandbox, Fintech, Regtech, CBDC, Digital Currency, Digital Real, BCB
Previous ArticleEBA Consults on Revised Guidelines on Risk-Based AML/CFT Supervision
Next ArticleCSSF Law Transposes CRD5 and BRRD2, Implements CRR2
ECB published Guideline 2021/975, which amends Guideline ECB/2014/31, on the additional temporary measures relating to Eurosystem refinancing operations and eligibility of collateral.
EIOPA published a report, from the Consultative Expert Group on Digital Ethics, that sets out artificial intelligence governance principles for an ethical and trustworthy artificial intelligence in the insurance sector in EU.
HKMA published the seventh and final issue of the Regtech Watch series, which outlines the three-year roadmap of HKMA to integrate supervisory technology, or suptech, into its processes.
EC launched a targeted consultation to improve transparency and efficiency in the secondary markets for nonperforming loans (NPLs).
BIS, Danmarks Nationalbank, Central Bank of Iceland, Norges Bank, and Sveriges Riksbank launched an Innovation Hub in Stockholm, making this the fifth BIS Innovation Hub Center to be opened in the past two years.
FDITECH, the technology lab of FDIC, announced a tech sprint that is designed to explore new technologies and techniques that would help expand the capabilities of community banks to meet the needs of unbanked individuals and households.
EC released the EU Taxonomy Compass, which visually represents the contents of the EU Taxonomy starting with the EU Taxonomy Climate Delegated Act.
FDIC is seeking comments on a rule to amend the interagency guidelines for real estate lending policies—also known as the Real Estate Lending Standards.
EIOPA published its annual report, which sets out the work done in 2020 and indicates the planned work areas for the coming months.
The ESRB paper that presents an analytical framework that assesses and quantifies the potential impact of a bank failure on the real economy through the lending function.