Today, international security tech firm Giesecke+Devrient (G+D) announced it will work with Banco do Brasil to trial an offline payment solution as part of the central bank’s DREX tests. DREX’s primary purpose is to operate as a wholesale central bank digital currency (CBDC) solution and platform. This enables interbank settlement for tokenized deposits and aims to encourage innovation in the tokenized economy.
DREX initially didn’t aim to be a retail CBDC because there was no need for it. Brazil already has the hugely successful mobile payment system Pix.
As with other offline payment solutions, the aim is to support users in remote areas without internet access or electricity or after outages or disasters.
“With offline payment, we can bring ease and technology to people who have difficulty accessing the technological infrastructure,” said Marisa Reghini, VP of digital business and technology at Banco do Brasil. “Brazilians can benefit from the solution in their daily lives, carrying out secure transactions in local shops, for example, without the need for a bank account or the Internet.”
The mention of no need for bank accounts is notable, given that DREX was not positioned as a retail CBDC. However, we’d speculate that non-bank wallet providers might work with banks for operational purposes. That’s how Brazil’s mobile payment system Pix works.
“A CBDC must work for everyone, anywhere, at any time. Only in this way can it be a truly inclusive public digital currency,” said Raoul Herborg, Managing Director CBDC, Giesecke+Devrient.
G+D offline CBDC experience
G+D has worked on offline payments as part of Hong Kong CBDC trials. It is also a partner of the Bank of Ghana for its retail CBDC.
Brazil plans to launch DREX by the end of this year. However, the onboarding of the 16 pilot projects was delayed by three months last year, which could impact the final launch date. The central bank has lost quite a few staff over pay-related protests.
