Mercado Bitcoin, which claims to be the largest exchange in Latin America, has teamed up with the Stellar Development Foundation (SDF) in order to develop one of the nine projects selected for the LIFT Challenge Real Digital, “a collaborative environment carried out by the Central Bank of Brazil (Bacen), in partnership with National Federation of Associations of Central Bank Servers (Fenasbac), to explore use cases for a Central Bank Digital Currency (CBDC).”
With this announcement, SDF joins CPQD and ClearSale “as part of Mercado Bitcoin’s LIFT Challenge consortium.”
The Bacen initiative aims “to identify the fundamental characteristics of an infrastructure for Real Digital that will be able to support the use cases presented by the participants of the LIFT Challenge.”
Bacen anticipates that the Real Digital will be “launched in the second half of 2022 and, in its first phase, will be piloted for a restricted audience.”
Mercado Bitcoin selected the Stellar network because “it is the network of choice for other CDBC projects, stablecoin issuance, and financial asset tokenization due to its unique combination of speed, efficiency, security, and compliance.”
Reinaldo Rabelo, CEO of Mercado Bitcoin, said:
“We are in a consortium of companies that have the structure and ambition to build robust solutions for the financial market through blockchain technology. Utilizing the Stellar network will allow us to deliver a complete case for evaluation by the Central Bank,”
SDF is a non-profit organization that aims “to unlock global economic potential, making money more fluid, markets more open, and people more empowered.”
Denelle Dixon, CEO of the Stellar Development Foundation, remarked:
“As SDF partners with Mercado Bitcoin in the LIFT Challenge Real Digital, the Stellar ecosystem grows stronger. Stellar’s network is prepared to support Mercado Bitcoin and the Central Bank of Brazil as they explore use cases for the Real Digital’s future. Stellar was designed for asset issuance, and its built-in compliance tools give Mercado Bitcoin a strong foundation to develop a solution with the features that Bacen expects to see.”
Among the main attributes that make Stellar excellent for implementing tokenization and payments projects are:
- Optimized for Payments: speed (~5 seconds for settlement of transactions); scalability (~200 transactions per second*); low cost (less than 1/10th of one cent per transaction).
- Security and Compliance: the Stellar network allows financial institutions to perform KYC/AML checks when transacting and includes built-in features allowing unified KYC/AML compliance across parties transacting on the network.
- Sustainability: the Stellar Consensus Protocol yields efficient transactions that are less energy-intensive than proof-of-work chains.
- Simplicity: Operations such as issuing a stablecoin, trading multiple assets, and securing multi-signatures are native functions of the Stellar network and can be implemented with just a couple of lines of code.