The Brazilian central bank Banco Central do Brasil is ramping up its research and development (R&D) efforts on Blockchain technology. The central bank is reportedly experimenting with “just about every Blockchain platform it can get its hands on.”
As of mid-November 2017, the central bank is in the process of developing proofs-of-concept on four different platforms. The platforms are Ethereum, JP Morgan’s Quorum, Hyperledger Fabric and R3’s newly launched Corda 1.0.
According to Banco Central do Brasil’s Deputy Head of IT Department, Aristides Andrade Cavalcante Neto, their efforts are intended to adopt a different business model by using emerging innovations.
"We are a central bank, and we enjoy a lot of stability. But you have to think change. You have to think in a different business model. So, for us, that's the most difficult part of this kind of work when we're talking about innovation."
Increasing interest in Blockchain
The PoC initiatives of Banco Central do Brasil are mainly focused on the use of Blockchain technology to back-up its existing real-time gross settlement system (RTGS) called the Brazilian Payment System and to better align its efforts with the growing interests shown by other central banks around the world to the technology.
Banco Central do Brasil Blockchain Team Analyst Jose Teodoro De Oliveira Filho said that the decision to focus on RTGS is due to the fact that there is no back-up yet to the system. The central bank officials want to know whether Blockchain will be the ideal backup system they have long been waiting for.
He further claimed that they want to know whether Blockchain can provide such features as privacy and low operational costs.
"If you want privacy, you can't have the other features, and if you want the other features, you can't have privacy. So, that's what we're trying to solve right now.”