Brazil’s Central Bank is set to integrate transaction data from its central bank digital currency (CBDC) system, Drex, into the country’s monetary policy framework, according to Henrique Videira, a top bank official speaking at the Token Nation conference in São Paulo on June 4.
The move marks a significant evolution in how the central bank monitors economic activity, leveraging blockchain technology to enhance real-time policy precision.
Drex Data to Guide Monetary Policy
Drex’s distributed ledger records every payment and asset transfer with a time-stamped, structured entry. By aggregating these entries at a group level, the central bank plans to track consumption trends, identify liquidity pockets, and analyze sector performance faster than with traditional data sources like tax filings or bank statements.
“We want a faster read on economic activity than tax receipts or bank statements provide,” said Videira.
These metrics will be incorporated into models assessing Brazil’s output gap and credit supply, providing input to the Monetary Policy Committee ahead of interest rate decisions.
Privacy Maintained, Insights Enhanced
While Drex provides granular economic data, Videira assured the public that personal identifiers are hashed, preventing individual tracking. The system aims to balance data utility with privacy protection, ensuring compliance with regulatory and ethical standards.
Strategic Advantage for Economic Forecasting
This initiative could make Brazil a global leader in CBDC-powered economic monitoring, offering a blueprint for other countries exploring the role of digital currencies in fiscal oversight and policy formulation.
Kosta Gushterov
Reporter at Coindoo
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Source: https://coindoo.com/brazil-to-use-drex-cbdc-data-for-interest-rate-decisions/