Digital Currencies Need Improved Governance, Says Former Brazilian Central Bank President
RIO DE JANEIRO, BRAZIL – Held early on Thursday evening, October 15th, the Future of Money event’s second panel, promoted by EXAME, discussed the democratization of the financial market and how the future of money could impact business.
The debate, conducted by the Head of EXAME Academy, André Portilho, had economist Gustavo Franco as guest, former president of the Central Bank and founder of Rio Bravo Investments.
Franco addressed different issues that, according to him, were or could be key players in promoting changes in the financial system in general, such as the PIX, cryptocurrencies and digital currencies issued by central banks (CBDCs).
Cryptocurrencies and digital currencies took up a considerable share of the discussion. According to Gustavo Franco, these projects need to be adjusted in terms of governance and regulation if they are to be adopted on a global scale.
“Given the tax evasion and money laundering issue, to think that we will have an anonymous electronic cash sphere…. forget it. It’s a libertarian dream, childish, immature, it won’t happen. And we shouldn’t waste our time with it”, said the economist, referring to Bitcoin.
However, Franco was not opposed to the new currencies or to the technologies that enable its development and launch: “In principle, I think it’s great. The more privacy, the better. We hate dictatorial regimes, confiscations, etc. So let’s work on the system’s governance. But to think that nobody will see it, no. That’s nonsense”.
According to Franco, any digital currency will need to be widely adhered to to become relevant. “The value of the platform is related to the number of interactions within it, which is dependent on the number of participants,” said Franco, with the proviso that this is not a premise applicable only to technology companies.
The PIX as a solution
The former Central Bank President also praised the PIX, but lamented the fact that the new Central Bank’s instant payment system was not anticipated to serve the more than 60 million Brazilians who requested the emergency aid distributed by the Brazilian government amid the novel coronavirus pandemic. It will be launched on November 16th.
“The pandemic has pushed the banking issue to the frontline, and the PIX can help in this regard. The PIX would have been a much better solution for the withdrawal of emergency aid than the release of the new R$200 banknote,” he compared.
Source: Exame
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