‘Does it make a Drex?’: understand the difference between the new digital currency and the PIX

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The official name of the new currency was announced by BC this Monday (7). Resource should be released to the public by the end of 2024. ‘Drex’: what is the new Brazilian digital currency? Drex – the name of the new Real Digital, which was revealed by the Central Bank this Monday (7) – generated a series of doubts about its differences in relation to the PIX. Soon after its disclosure, for example, Internet users started to joke on social networks: “Does it make a Drex?” — in reference to sending money via PIX. Despite being considered PIX’s ′′ cousin ′′ for its technological relationship, the new feature, which should be released to the public by the end of 2024, has differences. But which ones? The first — and main — is in the essence of each of the technologies: while PIX is an instant transaction tool, Drex is the currency itself — and the first official virtual currency in Brazil. Thus, PIX is a means by which money can be transferred. Drex is the money itself to be transferred. The new digital currency can be used both to “make a PIX” and to make payments or transfers through other existing modalities. Drex Functionalities The new currency project also provides for the purchase and sale of public securities, in partnership with the National Treasury. It will therefore be possible to buy and sell these securities using Real Digital. Experts also reinforce that the arrival of the new currency should bring access to new digital financial services, such as smart contracts (also known as smart contracts). In addition, Drex will be used in other services such as loans, insurance and investments. “We are using this technology to facilitate access to financial services. When you have the value registered and accessible in a simple and reliable way (…), you lower the cost and democratize access to the service”, said the project coordinator at the Central Bank, Fabio Araújo. Another difference in relation to PIX is that Real Digital must have a cost of use. However, the coordinator of the initiative says that the costs of financial operations, as they are done today, will be reduced with Real Digital. “It has a cost, but that cost looks like it will be much cheaper. We are working to build this technology in a way that is much cheaper than what we currently have available,” said Araujo. Drex: understand the country’s new digital currency How will the new feature work? In practice, the Real Digital will serve as a new expression of the physical banknotes, already issued by the BC, and will be guaranteed by the same fundamentals and by the same economic policies that determine the value and stability of the conventional real. The monetary authority points out that one of the guidelines for the development of digital currency is interoperability (ability of a system to communicate with another in a transparent way) with the means of payment currently available to the population. In addition to transfers via PIX, users will be able to make payments in stores, through their payment service provider – bank, payment institution or other institution that may be authorized by BC to do so. QUESTIONS AND ANSWERS: WHAT IS KNOWN ABOUT THE NEW DIGITAL CURRENCY In addition, the user will also be able to transfer digital reais to other people, transform them into conventional bank deposits and withdraw them in physical format, in addition to paying bills, bills and taxes . “That is, you will be able to move your Digital Reais in the same way that you would move your resources today deposited in banks”, said the BC in a note. The O Real Digital project is still in the testing phase and does not have an official launch schedule. The expectation is that the new currency will be released to the public at the end of 2024, according to the coordinator of the digital real initiative by BC, Fabio Araújo. The topic has been discussed by BC for years. In 2020, for example, the autarchy organized a working group to study the issuance of a Brazilian digital currency, having disclosed the project’s general guidelines in May 2021. The new currency: will be issued by the BC itself, as an extension of the currency physical, with distribution to the public intermediated by banks and payment institutions; its custody will be at the Central Bank; it can be exchanged for the traditional real (in notes), and vice versa, but the focus will be on financial transactions; the quotation against other currencies will also be the same; banks will not be allowed to lend these resources to third parties — as is currently the case with the physical real — and then return them to customers; there will be no remuneration, that is, the resources will not have an automatic correction; there will be a guarantee of legal, cybernetic and privacy security in operations. According to Fabio Araújo, coordinator of the initiative, the expectation is that the new currency will allow products that already exist in the financial system to be offered with a “greater variety”, meeting more specifically the needs of users and at a lower cost. According to the BC specialist, the idea is for the user to open the banking application or that of their preferred financial institution and find several options for the same financial service, which are “more adequate” in terms of profile and costs than the currently available. *With information from Isabela Bolzani and Lais Carregosa, from g1.

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