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Brazil’s central bank director calls Bitcoin a financial innovation
- August 8, 2022
- Bitcoin
Source: Shutterstock.com
The director of Brazil’s central bank, Fabio Araujo, praised Bitcoin and the technology behind the cryptocurrency. This is reported by the British news service Finbold.
Bitcoin is essential for Web3
Araujo disclosed that the Brazilian Central Bank began studying the characteristics of Bitcoin more than a decade ago. He said:
“We started to accelerate this in 2009, with the launch of Bitcoin, with distributed database technology that facilitates the creation of Web3. The Bitcoin application brings the Proof-of-Work (PoW) solution, which is fundamental for the services that Web3 brings to the population.”
Brazilian central bank favors CBDCs as currency
However, the director ruled out the possibility of using Bitcoin as a currency in Brazil in the near future. He cited Bitcoin’s volatility as a major drawback. In this regard, Araujo clearly positioned himself in favor of the introduction of CBDCs, or central bank digital currencies, as they would eliminate volatility and work as a payment solution. He added:
“Even though CBDC uses the technology that supports crypto, CBDC is not a crypto asset. The CBDC is an expression of the Real within the environment in which cryptocurrencies operate, in the same way that the Real does not compete with listed assets.”
The Bitcoin community criticizes the development of new CBDCs as the new state-controlled central bank currencies completely run counter to the advantages of decentralized cryptocurrencies like Bitcoin.
Disclaimer
This article does not provide investment advice. Historical cryptocurrency data is not a guarantee of future market developments. The author may hold several of the cryptocurrencies mentioned in this article.
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