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Brazil could have CBDC in two years, says central bank president

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The president of Banco Central — Brazil’s central bank — has announced Brazilians could expect to see a central bank digital currency before 2023. 

According to a Sept. 2 report from news outlet Correio Braziliense, Brazil could be ready for a central bank digital currency (CBDC) in 2022. Roberto Campos Neto, the president of Banco Central, stated that the country’s central bank had already undertaken measures to modernize the Brazilian financial system which has made a CBDC the natural outcome.

The president cited the country’s PIX instant payment system and open banking among those measures. The central bank plans to enable peer-to-peer and business-to-business transactions in 10 seconds or less using a mobile phone, internet banking or ATMs beginning in November. An open banking system allows for the exchange of user information between banks — enabling customers to switch more easily.

Campos Neto said:

“A CBDC distinguishes itself from cryptocurrencies without national trust, like Bitcoin, because it is just a new form of representation of the currency already issued by the national monetary authority.”

Banco Central has already started laying the groundwork for a CBDC. In August, the bank announced it had formed a dedicated group to assess how a digital currency could fit with the national payments ecosystem and what its impact could be on the Brazilian economy. Campus Neto said he expected the group would be ready to present their findings on the matter within 6-12 months.



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Regulation

New York authorizes first Yen stablecoin operator in the US

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New York has given the first authorization to a stablecoin backed by the Japanese Yen to operate in the U.S.

Per a Dec. 29 announcement, the New York Department of Financial Services has granted Japanese firm GMO-Z.com a charter to handle U.S.D. and Yen-backed stablecoins in New York. 

Given New York’s status as a global center, the NYDFS is the most prominent state financial regulator in the U.S. It is also one of the most aggressive. A pass to operate in New York often opens up the rest of the country. 

GMO’s charter is as a limited liability trust company rather than a full bank, the principle difference being in authorization to handle deposits. While a stablecoin operator typically needs the ability to hold reserves of the pegged asset, GMO’s charter limits its rights to hold other kinds of deposits not central to its ability “to issue, administer, and redeem” its stablecoins. 

The right to issue such non-depository charters has been a bone of contention between state regulators like the NYDFS and national banking regulators in the U.S. 

GMO president and CEO Ken Nakamura said: “We’re breaking ground with our move to issue the first regulated JPY-pegged stablecoin, which many see as a safe haven asset.” 

The NYDFS recently made changes to its famous BitLicense, including a conditional format that buddies up newly licensed firms with existing licensees. The first conditional BitLicense went to PayPal, facilitating the launch of its new crypto services earlier this fall with the help of longstanding licensee Paxos.