The Brazilian central bank announced that it will stop using blockchain in its digital currency project Drex.
Reason: Scalability and privacy issues, and the difficulty of balancing privacy, programmability, and scalability (what they call the 'Drex Trilemma').
Drex originally aimed to create a complete digital financial system based on blockchain, including major banks and services like Pix (instant payment), as well as smart contracts and cryptographic assets.
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🔹 Why was blockchain abandoned? ✅
The privacy solutions they tried were not sufficient for actual production.
Tests of several technologies such as Rayls, Anonymous Zether, and Starlight were not practical or cost-effective.
A massive hacking incident involving $200 million prompted the bank to rethink.
Change of leadership at the central bank from Campos Neto to Galipolo, adopting the idea that technology should be neutral and not just centered on blockchain.
The United States took a different approach allowing the private sector to innovate instead of creating a complete government network.
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🔹 The future ✅
Drex will become a financial infrastructure focused on facilitating guarantees and loans, not just a digital currency.
The central bank wants the project to be flexible in terms of technology, meaning that any suitable technological solutions can be used in the future.
Experts believe that the experiment was useful for teaching banks about digital tokens and cryptographic assets, even if the project did not succeed as planned.
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❓ Interactive question: In your opinion, do you think that blockchain is still the optimal solution for central bank projects, or are traditional solutions better at this time?
#CBDC #Drex #Blockchain #Crypto #Fintech ✅