In a recent statement, Gabriel Galípolo, president of the Central Bank of Brazil, emphasized a point that has sparked debate in the market: Is DREX truly a Central Bank Digital Currency (CBDC), or are we dealing with a different concept?
Around the world, CBDCs are often understood as a digital version of money issued by the central bank, typically in two forms. The retail CBDC, which is accessible directly to the public and functions as digital cash without the need for an intermediary bank. And the wholesale CBDC, intended for interbank transactions and high-value settlements among financial institutions.
DREX, however, takes a different approach. Rather than being a digital currency distributed directly to the public, it acts as infrastructure for tokenizing assets and deposits. Its main role is not to replace physical money with a direct digital version, but to allow banks and financial institutions to create digital representations of deposits and assets within the DREX network.
The idea of DREX as a tokenization infrastructure was already addressed in the first #SabaDREX a year ago, when the concept was still unclear in the financial system’s architecture.
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Tokenization is at the core of DREX. Instead of issuing “digital money” that circulates like virtual bills, authorized institutions tokenize customer deposits on a platform built with Distributed Ledger Technology (DLT). What circulates is not a “pure digital real,” but digital representations of funds held in banks.
This same logic applies to other assets such as government bonds, receivables, guarantees, and other financial instruments. Tokenization allows these assets to be moved, transferred, and used more efficiently within the financial system. One of the key advantages is collateralization — using tokenized assets as collateral in financial operations.
Galípolo pointed out a recurring problem in the financial system: the inefficient access to credit. Today, many credit operations are unsecured — lacking guarantees that could reduce risks and costs. The process of offering an asset as collateral is still bureaucratic, which leads many to turn to faster, yet more expensive alternatives such as credit card revolving credit.
With DREX and asset tokenization, this scenario could change. The use of collateral can become faster, more transparent, and automated, allowing consumers to access cheaper credit with less friction. Instead of a slow and bureaucratic process, DREX’s infrastructure enables smart contracts to validate and manage guarantees instantly, making secured credit a more accessible option for more people and businesses.
Greater efficiency in collateral use can reduce reliance on costly credit lines and increase the availability of credit at lower rates. For banks, this means less risk and more predictability. For customers, it means better financial conditions.
Therefore, DREX cannot be classified as a traditional CBDC — but it also goes beyond being just a tokenization system for banks. It positions itself as a hybrid infrastructure that enables the digitalization and tokenization of bank assets and deposits, opening new possibilities for credit, payments, and financial intermediation.
With this approach, Brazil may be creating a new model of financial architecture, contributing to the construction of the “Finternet” and inspiring other economies to rethink the role of digital currencies and decentralized infrastructure.