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Banco do Brasil has teamed up with German firm Giesecke+Devrient (G+D) to conduct pilot trials of offline payments as part of its central banking digital currency (CBDC) initiative, Drex.
The trials aim to explore various payment scenarios using the Brazilian digital currency in environments without internet connectivity or access to the electricity grid. Additionally, it will facilitate transactions during crisis situations, such as power or internet outages, where traditional cash payments were previously the sole option.
A key objective of the project is to enhance access to financial services for Brazilians with limited or no internet access by offering an alternative payment instrument to cash. Despite the popularity of immediate payment methods like PIX, cash remains widely used in Brazil, particularly among socio-economic classes D and E.
The Central Bank of Brazil is slated to launch the CBDC Drex by the conclusion of 2024.
Drawing from previous pilot projects, such as the offline CBDC trial phase of Hong Kong’s e-HKD, G+D will leverage its expertise to test critical factors like ‘offline capability’ and ‘interoperability’. This entails ensuring seamless and secure transactions under all conditions, allowing consumers to utilize their preferred network and digital wallet for transactions.
Marisa Reghini, Vice President of Digital Business and Technology at Banco do Brasil, underscores the bank’s commitment to democratizing financial services for the entire Brazilian population.
“Through offline payments, we aim to bring convenience and technology to individuals facing challenges in accessing technological infrastructure,” Reghini explains. “Brazilians can enjoy the benefits of this solution in their daily lives, conducting secure transactions at local establishments without the necessity of a bank account or internet connection.”
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