Allan Augusto Gallo Antonio, professor of Economics and Law at Mackenzie Presbyterian University (UPM) and Researcher at the Mackenzie Center for Economic Freedom (CMLE).
Jhonathan Augusto Gallo Antonio, lawyer and master's student in Economics and Markets at Universidade Presbiteriana Mackenzie (UPM).
DREX, Brazil's new and first digital currency, will be launched soon and has been presented as a promising innovation for the national financial system, but not all of the anticipated impacts are necessarily beneficial for the population. Although the official discourse points only to advantages, such as greater efficiency and reduced transaction costs, DREX can also generate consequences that negatively affect some citizens, especially in terms of privacy and digital exclusion.
A strong argument used to defend the use of DREX on national soil is the reduction of transaction costs, which, according to the theory of transaction costs, can increase the efficiency of economic exchanges.
In the Brazilian context, this efficiency is not guaranteed, as a significant percentage of the population does not have easy access to digital devices and the internet. Thus, the potential technological imposition brought by Brazil's first digital currency may, by increasing the population's dependence on technologies that are not accessible to everyone, contribute to an intensification of social inequalities, especially concerning the poorer and peripheral regions.
There is still another aspect that causes concern: privacy. DREX will be based on blockchain technology, which, in simple terms, means that there will be traceability and transparency in all transactions, raising serious concerns about the protection of personal data.
In this regard, in line with the theory of externalities, while this technology will be beneficial to the government in combating fraud and financial crimes, the constant tracking of transactions could expose individuals' personal information and sensitive data, creating an atmosphere of continuous and permanent surveillance. From this, the following ethical question can be raised: to what extent would the Brazilian population be willing to give up their privacy in exchange for a supposed greater efficiency in the financial system?
Finally, from the perspective of monetary policy, DREX has the potential to give the Central Bank (BACEN) even greater control over the money supply and the resulting inflation. Although many believe that this type of intervention can, in some way, be positive economically, the truth is that this potential for stricter control may end up resulting in greater government interference in people's financial lives and make the monetary system more susceptible to potential manipulations and political pressures. All this centralization, far from being a universal benefit, can create governance risks and end up imposing forms of economic restrictions.
Although DREX is constantly presented as a modern and efficient innovation to the Brazilian financial system, the promised benefits may not make sense when compared to the potential harms that will accompany it. In this way, digital inequalities, privacy threats, and greater concentration of power in monetary issues may end up creating more challenges than solutions, particularly when it comes to the most vulnerable layers of society. Therefore, it is essential to exercise great caution when adopting the perspective that the new digital currency will represent an undeniable advancement to the economy.
