Mercado Bitcoin, Stellar Team Collaborate on Brazil’s CBDC Project
Mercado Bitcoin announced on Tuesday that it has partnered with the Stellar Development Foundation (SDF) to examine one of the nine projects in the LIFT Challenge Real Digital.
LIFT is a collaborative environment hosted by the Central Bank of Brazil and the National Federation of Associations of Central Bank Servers that aims to assess the use cases of the region’s CBDC.
Under the partnership, Mercado Bitcoin - the largest exchange in Latin America and the Stellar Development Foundation (SDF) - will explore use cases for a digital currency to be issued by the Banco Central do Brasil (BCB). The Central Bank of Brazil seeks to pick out Real Digital's infrastructure characteristics that will support the use cases presented for the LIFT challenge.
Mercado Bitcoin said that it selected the Stellar network because it is the network of choice for other CDBC projects, financial asset tokenization, and stablecoin issuance and because of its unique combination of compliance, speed, efficiency, and security.
According to the announcement, CPQD, a Brazilian IT and communication firm, and ClearSale, a fraud management and chargeback protection services company, have also joined SDF in the LIFT Challenge.
Reinaldo Rabelo, CEO of Mercado Bitcoin, talked about the development and said: “We are in a consortium of companies that have the structure and ambition to build robust solutions for the financial market through blockchain technology. Utilizing the Stellar network will allow us to deliver a complete case for evaluation by the Central Bank.”
Denelle Dixon, CEO of the Stellar Development Foundation, also stated: "As SDF partners with Mercado Bitcoin in the LIFT Challenge Real Digital, the Stellar ecosystem grows stronger. Stellar's network is prepared to support Mercado Bitcoin and the Central Bank of Brazil as they explore use cases for the Real Digital's future. Stellar was designed for asset issuance, and its built-in compliance tools give Mercado Bitcoin a strong foundation to develop a solution with the features that Bacen expects to see."
The Brazilian CBDC project is moving forward because of the cooperation between the public and private sectors.
In March, the Banco Central do Brasil (BCB) obtained 47 applications from 43 firms that wanted to participate in the LIFT initiative, coming from the US, Germany, the UK, Portugal, Sweden, Israel, and Mexico.
BCB selected nine firms to explore the opportunities and possibilities that digital currency presents. Some of the companies selected included Mercado Bitcoin, the largest digital asset exchange in the Latin American region, Itaú Unibanco, the largest bank in the region with over 4,000 branches, and Banco Santander Brasil, the largest foreign bank in Brazil with over 29 million clients as well as Tecban, VERT, and Febraban, Visa, and Aave.
The LIFT Challenge initiative allows the central bank to work with the participants on the key matters relevant to the implementation of 'a digital real’ in order to deepen their understanding and business models and, therefore give continuity to developing a digital currency that can add functionalities to the national payment and settlement systems and generate benefits for the entire society.
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