According to a press release, the Stellar Development Foundation (SDF) will be merging with major exchange platform Mercado Bitcoin. The partners will work on the nine cases of the Central Bank of Brazil (Bacen) LIFT challenge.
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The initiative was implemented in collaboration with other Brazilian institutions. It aims to explore the adoption and use cases of a central bank digital currency (CBDC).
The Stellar Development Foundation will partner with Mercado Bitcoin, ClearSale and CPQD. These partners formed a LIFT Challenge consortium.
According to the press release, the Real Digital Challenge (LIFT) Challenge Laboratory for Financial and Technological Innovation will act as a collaborative environment to develop Real Digital, Brazil’s CBDC.
The project will determine the technological feasibility, use cases and infrastructure required for Real Digital adoption. The initiative also aims to improve the Brazilian financial system by attracting market participants, banks, payment institutions, technology companies and others.
These units are tasked with developing products based on Real Digital. The Central Bank of Brazil claims its CBDC will be deployed in the second half of 2022 with a first phase “piloted for a restricted audience,” according to the release claims.
Reinaldo Rabelo, CEO of Mercado Bitcoin, said the following about the initiative:
We are part of a consortium of companies that have the structure and ambition to develop robust solutions for the financial market through blockchain technology. By using the Stellar network, we can provide a full case for central bank assessment.
The SDF has been working with the Ukrainian government on their CBDC for several years. The nonprofit and its partners wanted to test the CBDC’s programmable capabilities, but updates on the project were lacking.
Why did Mercado Bitcoin choose Stellar as a partner?
Similar to the Ukrainian CBDC, the Real Digital is launched to drive payment innovation and make the Brazilian financial system more open and inclusive. Denelle Dixon, CEO of Stellar Development Foundation, claimed that working with Mercado Bitcoin will help the network grow.
She added:
Stellar’s network is ready to support Mercado Bitcoin and the Central Bank of Brazil in exploring use cases for the future of Real Digital. Stellar was built for asset issuance, and its built-in compliance tools give Mercado Bitcoin a strong foundation to build a solution with the features Bacen expects.
Mercado Bitcoin chose the Stellar network for its capabilities and because it believes it is “excellent for implementing tokenization and payment projects.” The network is capable of processing fast and cheap transactions, it allows financial institutions to implement their own KYC policies, it is considered not “power intensive” and much more.
Related Reading | SWIFT tests CBDC interoperability to enable cross-border payments
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