Specifically, Banco do Brasil (BB) is set to evaluate an offline payment solution within the pilot of the Brazilian Digital Real Electronic (DREX). This initiative aims to explore payment scenarios using the Brazilian digital currency in areas lacking internet connectivity or access to the electricity grid, with the objective of extending financial service accessibility to Brazilians currently underserved by traditional banking systems, thus offering an alternative to cash transactions.
According to the Financial Inclusion in Brazil, 2022 study carried out by Plano CDE, cash remains a prevalent payment method in Brazil, particularly within socioeconomic classes D and E. In the context of increasing digitalisation, the introduction of an offline payment solution presents an opportunity to advance financial inclusion in the country. The Central Bank of Brazil plans to introduce the CBDC DREX by the end of 2024, offering a digital payment option to individuals without bank accounts.
The main goals of the partnership
The partnership’s primary objective is to assess the feasibility of the technology and its alignment with the future DREX platform.
Through this partnership, Banco do Brasil and G+D aim to explore the capabilities of the DREX platform provided by the Central Bank, building on G+D’s prior experience with offline CBDC trials in Hong Kong. The focus includes assessing factors such as offline capability and interoperability to ensure smooth and secure transactions across various scenarios. The initiative will extend beyond urban areas to reach remote regions, providing financial access even in crisis situations such as power or internet outages.
While the initial focus of Bacen’s study is on operations involving the issuance, transfer, and redemption of Digital Real, Tokenized Real, and Federal Public Securities, the offline payment solution tested within the platform will enable the exploration of payment use cases in scenarios that lack internet or electricity connectivity.
In the official press release, representatives from BB highlighted the bank’s commitment to broadening access to financial services across Brazil, particularly for those facing technological infrastructure challenges. They also mentioned the potential for secure transactions in local shops without the necessity of a bank account or internet access. Officials from Giesecke+Devrient talked about the importance of inclusivity in digital currency adoption, expressing eagerness to collaborate with Banco do Brasil on offline payments to enhance financial inclusion in Brazil.
Banco do Brasil’s investment in studying the offline payment solution underscores its leadership in the financial market and commitment to democratising banking services. G+D’s expertise in offline payments, demonstrated in countries such as Ghana, positions them as a valuable partner for this initiative.