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Recently, Bolsa Família beneficiaries have expressed concern about major changes to benefit payments. The distribution method, now handled by Caixa Econômica Federal, may change in the future.
The president of Caixa Econômica Federal, Rita Serrano, said that Bolsa Família payments may be made through the Digital Real. This is Brazil’s new digital currency, still in testing, and the public launch is expected by the end of 2024.
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Beginning of the Digital Real as a Pilot Project
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The Central Bank began the Digital Real pilot project in March of this year, and it will last until February 2024. The project started in a simulated environment and began involving real amounts in May, with banks authorized and selected by the Central Bank.
Caixa Econômica is one of these institutions. In fact, Rita Serrano stated that the bank will play an important role in the project, actively contributing to Brazil’s financial digitalization and assisting with social inclusion.
Caixa’s Crucial Role in the Digital Currency
In short, Caixa is vital to Real Digital, being present in 99% of Brazilian cities and serving more than 155 million customers in Brazil through nearly 27,000 service locations.
In addition, Caixa is the largest bank in Latin America, managing approximately R$1.6 trillion in assets. In other words, the bank is promoting the digital currency in a way that no other bank in the country can.
Will Bolsa Família Be Paid in Real Digital?
Certainly, Caixa has a long-standing partnership with the Federal Government. The bank pays social benefits to millions of people every month, including Bolsa Família, the country's main income-transfer program.
Following the announcement, many began to think that Caixa could start paying Bolsa Família through Real Digital, and the bank's president confirmed this possibility. “We can consider paying social benefits with tokenized currency in the future,” said Rita Serrano.
In addition, she said that Real Digital will also be important for real estate credit and housing finance opportunities, as it “can speed up and improve service”. Rita Serrano’s statements were made during the official launch of the consortium with Elo and Microsoft for participation in the Real Digital pilot project.
Will Real Digital Replace Paper Money?
After testing with the pilot project, Real Digital will undergo an assessment in March 2024, before its public launch, scheduled for the end of 2024.
With the imminent launch of the currency, many Brazilians wonder whether Real Digital will replace paper money in Brazil. However, those concerned about this can rest assured, as this will not happen.
In reality, the official virtual currency will be an extension of paper currency. Thus, people will be able to use it for financial transactions, just as they already do with money in bank accounts or banking apps. In addition, the BC will issue and oversee the currency.
In summary, Brazilians will have another way to make virtual financial transactions. In addition, they will also be able to convert the virtual currency and withdraw it as cash. The main objective of the Digital Real is to increase efficiency and reduce costs, offering services that are currently impossible in Brazil.
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Cost Reduction with the Digital Real
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The BC says that the Digital Real will reduce banking costs for the population. In short, this is expected to help popularize banking products through fintechs, small technology companies operating in the financial sector.
Finally, it is important to highlight that scarcity is crucial for digital currencies. As they are considered assets, scarcity increases their value, as with Bitcoin. However, since the Digital Real is an extension of paper money, its value remains the same as physical cash.
