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Brazil’s Central Bank is accepting applications for the second round of tests for its Drex digital currency project, with a focus on smart contract use. Applicants will need to ensure their proposals adhere to Brazil’s General Data Protection Law. Thirteen diverse projects have already been confirmed for this round, and will explore tokenization and decentralized finance. Despite the digital currency concept being introduced in Brazil in 2015, actual testing only began in 2022. However, progress is steady and collaboration with other systems may be required for Drex to replace Brazil’s real-time gross settlement system.

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Brazil’s Central Bank is door wide-open for businesses to apply for the second round of its digital currency project called Drex. In particular, they’re big on ideas that can roll out using smart contracts. Drex is not live just yet, but the big brains at the Central Bank suggest they might start running live tests after this round.

Got a project proposal? There’s no limit to the number of ideas the selection committee will consider. However, privacy is key, especially in line with Brazil’s General Data Protection Law. Your proposal should also look into any legal roadblocks to getting your project off the ground.

With thirteen projects already confirmed for this round, the genres vary. They range from international trade finance, improving the foreign exchange market, to negotiations involving cars, carbon footprints, debentures, and even real estate.

In this testing phase, there’ll be a deep dive into tokenization, decentralized finance (DeFi) and how Drex will work with other networks. The government’s goal was to create a tokenization sandbox this year. But as it stands, the plan is to maintain as much of the system internally and only collaborate where necessary.

The pace at which Drex is moving ahead is pretty brisk. For Drex to replace Brazil’s real-time gross settlement system, it will likely need to work with other systems on some level. This arrangement may end up being non-negotiable.

Banks led most of the sixteen teams that took part in the first testing phase, and thirteen members of the Brazilian Association of Banks indicated their interest in signing up.

Though the concept of a digital real was initially introduced in Brazil in 2015, the actual tests only kicked off in 2022.

Source: Cointelegraph