The second phase of this pilot project is called “Drex” and represents an important step to test how the digital currency will function in Brazil’s financial system. In the first phase, BCB selected 14 participants in May 2023, and this second phase further expands the number of participants and the scope of the project.

BCB and the Brazilian Securities and Exchange Commission (CVM) received 42 proposals for this phase, and as a result of the evaluation of these proposals, world-renowned companies were among the projects selected. BCB will supervise 11 projects in this phase, while CVM will monitor two projects.

According to BCB’s statement, the infrastructure created in the second phase of the pilot will focus on testing the implementation of financial services through smart contracts created and managed by participating platforms.

This process is considered an innovative step in Brazil’s financial services sector and has the potential to expand the future use of smart contracts.

The projects selected at this stage include leading financial institutions in Brazil and the world. For example, global payments giant Visa will work with Brazilian brokerage XP and digital bank Nubank to optimize the foreign exchange market.

This collaboration aims to make foreign exchange transactions faster, safer and more efficient. At the same time, Spanish banking giant Santander has been selected to work on a loan project focused on auto operations and carbon reduction.

Other important local financial institutions that will take part in this pilot program include Brazil’s leading banks Bradesco and Itaú Unibanco. Additionally, the Brazilian Stock Exchange (B3) will also play an active role in this process. The participation of these institutions is critical to testing the impact and potential of Real Digital in Brazil’s financial ecosystem.

BCB announced that it will open a new call for applications in the third quarter of 2024 for companies wishing to participate in the Drex pilot program. This phase of the pilot program aims to test the implementation of smart contracts and these tests are planned to be completed by the end of the first half of 2025.

The Real Digital project is a strategic initiative that aims to strengthen Brazil’s place in the digital economy and accelerate the adoption of innovative technologies in its financial system. This project is seen as part of Brazil’s effort to make its financial system more digital, more inclusive and more efficient.

The use of smart contracts could enable digital currencies to become more common in daily life and financial services. Such technologies can play an important role in the transformation of financial services not only in Brazil but also globally.

The 13 participants selected in the second phase of the Brazilian Central Bank’s Real Digital project represent a major step towards the country’s digital currency goals.

This phase will test how financial services can be implemented through smart contracts, and the results of these tests could form the basis of future digital currency projects. Brazil’s innovative approach could help the country take a leading role in digital transformation in the financial services sector.