Transcript
A (0:00)
Hey, everyone, I'm Jen Senassi. This is market's outlook on CoinDesk. This episode comes to you from Stellar Meridian 2025 in Rio de Janeiro, Brazil. One of Brazil's leading voices on the intersection of law, technology and society. As the founder of the Institute for Technology and Society of Rio, he is advising Brazil's central bank on the creation of Drex. He also connects this local expertise with a global perspective. As a board member of the Stellar Development Foundation, Ronaldo Lemos. Welcome to the show.
B (0:34)
Thank you so much. Hi.
A (0:37)
All right. We haven't talked at all about Drex on the show and so I'm really excited that we are going to wrap it up by talking about it. Its has been working with the central bank on Drex. This is Brazil's central bank digital currency. Tell us a little bit about the progress that's been made here and what's driving the central bank to launch this.
B (0:54)
Absolutely. So Brazil has been very innovative in terms of, you know, changing finance. And the pillars of this innovation are pix, which I think everyone gets to know. It's a payment system, very well designed, that allows for instant payments in Brazil at no cost for the end user. But the second pillar is actually Drax, which is the real digital, the digital version of the Brazilian currency. And the important thing about Drax is that it's programmable. So the idea is not only to release a digital version of the currency, but to make it programmable and integrated with platforms. And my hope is we, with Soroban and other platforms as well, so that you can actually create smart contracts on top of it. So that's the plan. And we are advising the central bank, especially on the privacy issue, which is not simple, especially because of the scale of Brazil. But we're, you know, trying to solve that problem so that Dex can be released in full as soon as possible.
C (2:08)
I think if you can explain the difference between a CBDC and a Stablecoin, I think our audience sometimes gets them confused. But in addition, maybe you can also talk about whether the end user cares, you know.
B (2:20)
Yeah, this is a great question. First, CBDCs, they are public money issued by the central bank. So the liability lies on the central bank itself. A stablecoin is issued by a particular project and the liability is on that project itself. So there are two different things. So the Brazilian digital real will be just like a digital version of fiat money issued by the central bank. The user. Actually, it doesn't care that much about the pipelines. It doesn't know the nitty gritty of how Drax works and how it operates, but it cares a lot about the applications. So the user is looking for new applications just like what Pix has become. Pix is a huge success. Just to give you a sense. Every day there are 2.3 transactions of Pix by person in Brazil and we have like 210 million people in Brazil and each day there's like two transactions 0.3 by Pix. So it works because the end applications are very valuable and with Drax it's going to be the same thing. So the applications are collaterals. You can build collaterals through smart contracts and also democratizing finance. Brazil treasury bills, they pay a lot. They pay about 15% a year, which is higher than the US and the Brazilian currency has been pretty stable for the past many years. So how do you democratize that you can provide actually access to those bills to, you know, a lot of customers that don't have access to them right now. That's a good application for the health digital and even maybe to people outside Brazil that can have access to those high yielding bills that are issued in Brazil.