TheCentralBankofBrazilproppeduptokenizationand“openfinance”askeyelementsofthefuture’sfinancialsystem.InapanelpresentationbeforetheIMFandtheWorldBank,thebank’spresidentstatedthattheintersectionbetweenthesehadbeenunderestimated.
CentralBankofBrazilConsidersTokenizationPotential‘Underestimated’
InarecentpanelpresentationheldinWashington,theCentralBankofBrazildelvedintothepossibilitiesoftokenizationanditsbenefitstothefinancialsystemwhenintegratedwithotherelements.
CentralBank’sPresidentRobertoCamposNeto,whoparticipatedinthepanelbeforetheInternationalMonetaryFund(IMF)andtheWorldBank,stressedthatthepossibilitiesoftheintersectionoftokenizationandelementslike“openfinance”hadbeenunderestimated,proppingupthepotentialofthesesolutions.
Openfinanceinvolves“sharingdata,products,andservicesbetweenregulatedentities”withuserpermission.Theseproceduresarefocusedonencouraginginnovationandpromotingcompetitiontofacilitatetheimplementationofnewbusinessmodels.
Atthepresentation,CamposNetoexplainedthattokenizationallowedtobringprogrammablepayments,andbroadopenfinancetogetherasbuildingblocks,“exploringthecapacitytohavethisfinancialmarketplaceinasingleenvironment.”
Highlightingtherelevanceoftokenizationfortheconceptofbankingbalancesheetsandoperations’efficiency,CamposNetodeclared:
Bankswillslowlymovefromlookingatthebalancesheetonanaccountbasistolookingatitona‘token’basis,andwethinkthathasalotofefficiencyandproductivity.Tokensarebetterforbankstomanagerisks,tomanagecollateralandfunding.
Tokenizationandstablecoins,twomainelementsofthecryptocurrencysystem,arepartofthebank’sregulatoryschedulefor2025.CamposNetopointedouttheadvantagesofdigitalassetsbefore,claimingthesehad“thepotentialtogenerateenormousefficiencygainsinpaymentandcreditservicesandpromotetheexpansionofthecapitalmarket.”
Readmore:TokenizationandStablecoinsClosetoBeingRegulatedinThisLatamGiant
Thebankhasbeenattheforefrontofinnovation,hintingatnewtechnologieslikeartificialintelligence(AI)aspartofDrex,itscurrentcentralbankdigitalcurrency(CBDC)project.
Readmore:CentralBankofBrazilHintsataFutureIntegrationofAIIntoItsCBDC
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