Brazil central bank names its digital currency 'DREX,' scheduled for 2024 launch

BRASILIA (Reuters) - Brazil's central bank forthcoming digital currency, set to launch next year, will be named DREX, it announced on Monday, aiming to use the currency to boost financial services.

The DREX will use distributed ledger technology (DLT) to settle wholesale interbank transactions, while retail access will be based on tokenized bank deposits.

Officials from the central bank previously predicted that the adoption of the Brazilian digital currency would commence by the end of 2024, following the completion of its testing phase.

But Fabio Araujo, the coordinator of the initiative at the bank, said that employee strikes demanding better career advancement could potentially impact the project.

During a live discussion organized by the central bank, he emphasized that the development of DREX is primarily aimed at improving access to financial services in the country.

"By enabling simple and reliable access to registered values through DLT technology, we reduce costs and democratize access to financial services," Araujo stated.

He also highlighted that Brazilians are already engaging in extensive digital payments through the instant payment platform Pix, which was launched in late 2021 and has been widely embraced.

Now, the expectation is that DREX will bolster lending, investments, and insurance services. "We aim to make these financial products accessible to the public and increase financial inclusion in Brazil," Araujo added.

(Reporting by Marcela Ayres; Editing by Aurora Ellis)