Big Companies Drop Drex Like a Hot Potato – Is It the End for Brazil’s Digital Currency?

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In a stunning turn of events, major companies like Microsoft and EY have hit the brakes on their involvement in the Drex project, the Brazilian CBDC. Why? Turns out the central bank’s decision to drop the ball on the second phase of the pilot wasn’t exactly the green light they were hoping for. Surprise, surprise.

Drex Faces a Major Roadblock as Big Players Pull Back – Looks Like Brazil’s Digital Currency is Stuck in Traffic

So, it looks like Drex, Brazil’s bold attempt to launch a central bank digital currency (CBDC), is stuck in the mud. Development’s been crawling along, with fewer resources dedicated to the project and no one really knowing what happens next. But who’s to blame? Well, it’s the central bank, obviously. Their lack of enthusiasm for the second phase of the CBDC pilot has sent the whole thing into a tailspin. Nothing says ‘we’re serious’ quite like pulling the rug out from under your partners mid-project.

According to Valor Economico, the two companies leading the charge on privacy solutions—Microsoft and EY—have, how shall we put this, eased off the accelerator. Apparently, they’re not too thrilled with the central bank’s refusal to approve any of the privacy solutions during the second phase of the pilot. The privacy solutions, you know, the ones that are supposed to protect your secrets while the government snoops around like a kid at a candy store. Classic move, central bank.

Now, the Drex project is about as stuck as a car in traffic after a morning coffee spill. None of the privacy proposals, which were supposed to keep transactions secret but still let regulators peek behind the curtain, have managed to meet the central bank’s *extremely* high standards. Surprise again—no one could get it right.

It’s not all bad news, though. EY, the folks running the Starlight privacy project, have *only* lost three people from their team. Meanwhile, Microsoft—after throwing tons of resources into the ZKP Nova privacy solution last year—has decided to pull back. But don’t worry, they’re not completely abandoning ship. ZKP Nova will still be tested, and Hamsa, a Microsoft partner, will keep it afloat. So, there’s that.

In case you were wondering if Drex was still a thing, the last public report, from February, said that none of the privacy solutions had met the central bank’s sky-high expectations. Since then, crickets. No updates, no answers. It’s like waiting for a text back from someone who’s clearly ghosting you.

Rogerio Lucca, the executive secretary of the central bank, weighed in on the whole fiasco recently. He told the public that the technical teams are still “studying” the project’s future. Fancy that. “Based on the results of the tests that are being carried out, the technical teams are currently discussing possible future steps for the project,” he said, which sounds suspiciously like ‘We have no idea what we’re doing, but we’re still pretending to work on it.’ No word yet on what these tests actually found. Maybe the results are still stuck in traffic too?

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2025-04-11 13:57