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Central Bank announced the name of its digital currency, and its functionality raised questions about Pix’s future. Find out more!
The Central Bank named Brazil’s new digital currency Drex. This step by the institution aims to expand financial transaction options and promote digital inclusion. According to the Central Bank, the expectation is that this innovation will act as a Pix for large-scale financial services.
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With the announcement, uncertainties are likely to have emerged, especially considering its connection with the instant transfer system, which is widely used by Brazilians today. Currently, Pix represents one of the most widely used payment methods.
It is important to clarify that Drex acts as a digital representation of physical currency. In other words, R$ 1 is worth 1 Drex, and so on. Like cryptocurrencies, this national digital currency will be based on blockchain, a highly secure type of digital ledger.
Pix versus Drex: what are the differences?
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Although Drex may operate in a way similar to Pix, its use is primarily intended for higher-value transactions. While Pix operates in reais, following rules established by the Central Bank and financial institutions, in the case of the digital currency, transactions will take place through the blockchain.
In this context, the greatest discrepancy lies there. Therefore, we can say that Pix will continue its normal operation, since the platform allows transactions of varying amounts to be carried out quickly, simply, and free of charge, and this will remain the case.
Drex Capabilities
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The Central Bank projects that Drex will be accessible to the public at the end of 2024 or beginning of 2025. Once launched, this currency will apply to a variety of services, including:
- Transfers;
- Making payments;
- Purchase of government bonds;
- Implementation of smart contracts.
More applications should be introduced soon. Furthermore, it is worth emphasizing that it will act as a currency intended for large transactions, circulating among financial institutions. This indicates that consumers will have to manage it through digital wallets.
