possibility of leverage by public and private institutions to avoid a reduction in supply, which could impact interest rates and harm economic growth. For all the reasons set out above, we are presenting this complementary bill for consideration by our distinguished fellow senators, to ensure the necessary legal certainty that the initiative requires,” she argues in the justification for the bill.
To discuss the Central Bank's initiative and Soraya's project, the Communication and Digital Law Commission (CCDD) held a public hearing in July 2024 with representatives from the Central Bank, the Ministry of Finance and banks, as well as technology and cryptocurrency experts. When opening the debate, Senator Carlos Portinho (PL-RJ), the project's rapporteur, stated that the possibility of issuing digital currency puts Brazil at the forefront of the world.
“The creation of Drex is not only a step forward in the debureaucratization of our financial system, it is an opportunity to promote tax justice, financial inclusion and economic efficiency, while strengthening the integrity of our system against illicit practices. This project represents a fairer, more inclusive and prosperous future for Brazil,” said the senator.
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Secrecy
For Portinho, digital traceability will make it more accurate to monitor transactions and combat illicit activities (such as money laundering and tax evasion). Despite this positive point, he highlights the concern about the new currency's compliance with the General Data Protection Law (LGPD), to guarantee the confidentiality of transactions and the privacy of Drex users.
André Silva Jardim, who represented the Brazilian Federation of Banks (Febraban) at the CCDD public hearing, stated that banks currently have means of ensuring banking secrecy, and that this will also work with Drex. He reported that Febraban has a technical cooperation agreement with the Central Bank and that technicians from the banks are working together with the BC to develop Drex — including with regard to security issues.
Researcher Daniel de Paiva Gomes, advisor to the Brazilian Cryptoeconomics Association (ABCripto), highlighted at the hearing that many Brazilians have doubts about the possibility of digital currency giving the State the ability to track people's money. However, according to him, users' privacy will be preserved. For Gomes, access to information and the blocking of resources, for example, will continue to depend on judicial authorization, as is currently the case.
“It is very important to emphasize that these mechanisms already exist in the traditional system. (...) Brazil, being a democratic state of law, which lives with due legal process, would never end up in a situation of indeterminate confiscation without prior due legal process,” he emphasized.
João Aragão, a specialist in Technology and Innovation Applied to Financial Services at Microsoft, explained that cryptographic analysis makes it possible to prove that information exists and is reliable, with visibility only for those who should have the information, such as the courts, for example. According to him, this would be possible by building this type of system in layers.
“So, whoever is in that transaction can see it, but whoever is around that transaction will not have that visibility. (...) Layer 1 would be the Central Bank layer, which is governing; layer 2 could also be the one where each and every transaction that should be private should be, which is a privacy layer. So, today, this privacy of information in wholesale and retail is feasible”, explained Aragão.
ABCripto CEO Bernardo Srur highlighted that Drex is “an important transition tool to the digital economy.”
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Another possible advance for Drex in the country occurred with the approval of a draft by the Federal Council of Real Estate Brokers (COFECI), aimed at the tokenization of properties and contracts on the blockchain, as reported by Cointelegraph Brasil.
