The annual Drex Forum provided an overview of the advancements achieved so far and the next steps for the digital real project.
Drex’s evolution and the first phase of the pilot
This past week, the Central Bank of Brazil (BC) held the Drex Annual Forum in Brasília. The event provided an opportunity to review the progress made so far and outline the next steps for the digital currency project.
The Drex pilot started two years ago, and a lot has been accomplished in that time. From its inception, Drex has aimed to balance privacy, programmability, and decentralization—a challenge at the core of developing a blockchain-based Central Bank Digital Currency (CBDC).
This initial phase enabled the creation of the infrastructure, execution of tests, and experimentation with real-world use cases.
The first phase of the pilot—recently concluded—was intensely experimental. Sixteen consortiums, involving nearly 70 institutions, simulated digital asset operations, including:
✔ Federal government bonds
✔ Bank reserves
✔ Bank deposits
One of the main breakthroughs was the simulation of final settlements at the client level—a first for Brazil. Traditionally, these settlements occur only between financial institutions, making this an important step forward.
Challenges: balancing privacy and governance
One of the biggest challenges discussed was finding solutions to balance privacy and governance.
While blockchains are inherently transparent, a CBDC must ensure a level of privacy that protects both user data and regulatory requirements.
However, this cannot come at the expense of programmability, since the ability to create smart contracts and innovative financial services relies on this feature.
Drex enters the second phase of the pilot
Drex is now entering the second phase of its pilot with a broader scope.
This time, not only will the Central Bank play an active role, but participants will also be able to develop and deploy smart contracts on the platform.
The goal is to create a decentralized ecosystem, where financial services can be created and operated by various market participants, expanding the possibilities for innovation.
New use cases in phase 2
This phase has already begun with 13 selected use cases, including:
✔ Collateralized loans
✔ Receivables trading
✔ Real-world asset tokenization (such as real estate and automobiles)
Additionally, other regulatory bodies—such as the Securities and Exchange Commission (CVM) and real estate registries—are getting involved, further expanding Drex’s potential applications.
Exploring new privacy mechanisms
One highlight of this phase is the exploration of new privacy mechanisms.
By testing different solutions, Drex aims to provide flexibility for each use case, allowing its infrastructure to adapt to the financial system’s evolving needs.
The future of Drex: towards a Unified Ledger?
The Forum also introduced discussions about Drex’s future, including the idea of a Unified Ledger—a single platform for multiple asset types.
This opens the door to the tokenization of real-world assets, such as:
✔ Carbon credits
✔ Agribusiness securities
Additionally, Drex’s potential to transform the credit market was emphasized, particularly through the creation of tokenized collateral.
By digitizing guarantees, collateralized credit could become more efficient and accessible, benefiting both large enterprises and small businesses.
The path ahead: more participants and continuous evolution
The Central Bank will soon select a new group of pilot participants, this time including institutions that were not part of phase 1 and are not in the first part of phase 2.
Drex’s journey is just beginning, and we will continue to monitor its developments every Saturday.
📌 Article originally published in Blocknews.