Brazil has become a global leader when it comes to innovation in the financial system. The launch of Pix in 2020 was a game-changer: it enabled instant, free transfers available 24/7, replacing old habits like cash, wire transfers, or bank slips. Now, with the arrival of Drex, the digital version of the Brazilian real issued by the Central Bank, our country is preparing for another transformation, a somewhat quieter one, but still with the potential to have a huge impact on our financial journey.
Drex, which is being developed as Brazil’s official digital currency, is not just a “virtual version” of the Brazilian real, as many believe. It is an infrastructure based on distributed ledger technology (blockchain), which will enable smart contracts, greater security, and new possibilities for automating financial transactions. Unlike Pix, which merely transfers funds between bank accounts, Drex allows the currency itself to have programmable rules, opening up space for innovation in areas such as credit, insurance, conditional payments, and much more.
As the digital currency system develops, the Central Bank intends to strengthen security and user data protection policies. This measure is truly necessary, given that data indicates that Drex has already handled R$2 billion in pilot transactions by December 2024, with an initial participation of 20 financial institutions. By 2025, this figure is expected to exceed R$50 billion, with the participation of more than 100 banks and fintechs. According to a Swiss Capital survey, the use of Drex can reduce financial institutions’ operating costs by up to 40%, due to the elimination of intermediaries in transactions and the use of smart contracts.
Everyday impact
With the integration between Pix and Drex, consumers will be able to enjoy an even more seamless financial experience. Imagine paying your monthly rent through a smart contract that automatically transfers the amount on time, or obtaining an instant loan with pre-programmed collateral via Drex. Bureaucracy will be replaced by automation, and trust will no longer depend solely on intermediary institutions.
Furthermore, I believe that digital currency can be a powerful ally in financial inclusion. Pix has already taken the first steps in this direction, offering a simple payment method to millions of unbanked Brazilians. Drex can further expand this access by enabling fintechs and other institutions to create more accessible, personalized, and secure products, leveraging the potential of smart contracts and decentralization.
Of course, not everything is rosy. The complete digitalization of money raises important questions about privacy, state surveillance, and data security. There’s also the risk of digital exclusion, especially for segments of the population with limited access to technology or the internet. It will be crucial to ensure that Drex is intuitive and accessible, and that public policies accompany its implementation, focusing on financial and digital education.
Brazil is at the forefront of the transformation of the financial system. With Pix already established and Drex under development, we are moving toward an ecosystem where money will be smarter, more efficient, and more inclusive. However, the success of this journey will depend on the ability to balance innovation with responsibility, ensuring that the benefits of this new era reach everyone.
Renan Basso is co-founder and business director of MB Labs, a renowned company specializing in consulting and development of digital applications and platforms. Basso has a solid career in the technology sector. With a degree in computer engineering from PUC Campinas and an MBA from DeVry Educacional do Brasil, he is a technology specialist, software engineer, and systems developer for large companies. He specializes in building technology for the financial industries and super apps. He has extensive experience in the technology and finance sector, with the goal of driving innovation and creating solutions for fintechs.
