BRASILIA (Reuters) – Brazil’s central bank governor Roberto Campos Neto said on Friday he opposed the creation of a common currency, saying that in the age of digitalization we need one to benefit from it. said no.
“It’s a very old idea that solves a problem that doesn’t exist anymore,” he said at an event hosted by Barrow Capital Group.
“If you believe in digital payments and advances in the digitization and tokenization of processes, you don’t need a common currency to get the trade and efficiency benefits that a common currency protects, but I don’t know if it works. I don’t know. “
His remarks come after President Luis Inacio Lula da Silva recently called on the BRICS group of major emerging economies to consider adopting a common currency for trade purposes and reduce their reliance on the dollar. It follows.
Campos Neto emphasized the potential power of digital solutions to provide effective alternatives.
He also reiterated his opposition, specifically referring to the proposal for a common currency between Brazil and Argentina, which the government had previously mentioned.
According to Campos Neto, a common currency will blend the characteristics of the two countries, resulting in a mixture of interest rates and inflation, which are currently at very different levels.
“There should be a ‘digital’ minister. Someone should think about digital solutions,” he added.
Regarding a convertible currency, he said it was part of the bank’s plans, but argued that the adoption of a currency by other countries should not be a cause in itself, but the result of other factors, citing a phased approach. emphasized the need.
Campos Neto also said that a tokenized deposit-based central bank digital currency (CBDC), which is progressing through a pilot phase, will pave the way for a more digitally oriented and competitive financial intermediation system. Stated.
He defended that CBDBs in Brazil are much easier to regulate than other forms of CBDCs, as tokenized bank deposits are subject to the same regulations governing traditional deposits.
Reported by Marcella Ayres.Editing: Chizu Nomiyama
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