Brazil rolls out blockchain-based digital ID


Brazil has launched its new national identity program powered by blockchain technology, with Rio de Janeiro, Goiás, and Paraná being the first states to issue this.  


According to the press release, over 214 million Brazilians will soon be using blockchain technology for digital identity. Rio de Janeiro, Goiás, and Paraná will be the first states to issue identification documents on-chain through a private blockchain developed by Serpro, Brazil’s national data processing service. The whole country will be able to issue identity documents through blockchain technology by early November 2023.  


The local Brazilian government has stated that the national ID project is crucial in targeting organised crime, allowing government sectors to work together by offering a simpler way to access services and simplifying administrative records. A similar initiative was disclosed by Argentina, which would allow residents to access identity documents through a digital wallet.  


Brazil's digital transformation  Over the past few years, Brazil has been working to unify identity issuance across its almost 30 states. The newly adopted technology will allow a more secure data exchange between the Federal Revenue and government departments, stated the official announcement.  


An additional development in the country is an upcoming Central Bank Digital Currency (CBDC). The government released more information about the project in August 2023, previously referred to as the digital real, and now has been given a rebranded official name, Drex. As per the previous reports, the central bank has plans to expand business access to capital through a tokenisation system associated with the Drex. The Drex code was discovered to allow a central authority to freeze funds or reduce balances, according to a local developer.  


Other recent developments in Brazil  One of the most relevant developments in Brazil’s payments landscape is represented by the introduction of Pix, a multi-purpose open instant-payment scheme developed by the Central Bank of Brazil with the aim of making banking and consumer interactions more inclusive.  Pix is already among the top 3 preferred payment options in Brazil – ahead of e-wallets, debit cards, and bank transfers. Due to the increasing popularity of Pix, in 2021, Brazil recorded 8.7 billion real-time transactions, and the widespread adoption of this payment method led to estimated cost savings of USD 5.7 billion for businesses and consumers.   


Payment methods such as Buy Now, Pay Later (BNPL) and e-wallets have risen in popularity in the Brazilian market. One of the reasons behind the increased use of e-wallets is Brazilians’ concern over fraud targeting credit and debit cards – which led them to opt for a payment method that provides only tokenised details of their financial identity.  


Source : The Paypers / October 03, 2023 logo


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