The Brazilian banking behemoth known as Itau Unibanco will soon begin working on a new initiative that will involve the establishment of a stablecoin that will be tethered to the Real, the country’s national currency. During the LIFT (Laboratory of Financial and Technological Innovations) Lab program, the proposal that the bank submitted was chosen as the winner by the Central Bank of Brazil.
Itau Unibanco Is Going to Develop a Real-pegged Stablecoin
The LIFT Lab program is an ongoing initiative that focuses on enhancing the country’s economic and financial infrastructure on a yearly basis. The most recent developments bring the central bank closer to implementing CBDC.
The Central Bank of Brazil is making headway with its pilot project to introduce the virtual Real, which will serve as the CBDC for the country. The project will be announced by Itau Unibanco, which is one of the leading banks in the country and has been selected by the bank.
The bank is going to work on developing a solution for decentralized finance (DeFi), which will entail the production of a stablecoin that is pegged to the national currency. This approach would be utilized by the agencies for the majority of the functions in the liquidity pools. On the other hand, it would connect the national currency with other stablecoins based on fiat currencies all over the world. It is also possible that it may promote alternative investments, asset pooling, custody, and management of assets through the use of software that is built on blockchain.
In addition, the central bank chose this initiative along with seven other projects to be a part of the LIFT Lab program, which is currently in its fifth edition. The purpose of the program is to encourage more innovative financial practices across the nation.
The LIFT Lab Program Also Includes These Other Initiatives
In the meantime, Andre Siqueira, who is in charge of the technology department at the central bank, was discussing the idea, and he said:
“By making use of LIFT Lab, we have the opportunity to communicate with the general public and have a conversation about the role that the Central Bank plays in fostering innovation within the nation’s financial system. As LIFT Lab enters its fifth year of operation, the most current edition, which includes eight separate activities, represents a significant milestone for the company. A credit grant solution is one of the other projects that are being undertaken as part of the LIFT Lab program being run by the central bank. People who are less fortunate and who live in favelas are eligible for this credit grant.
In the meanwhile, the solution has to make it so that members of the community are the ones who are in charge of administering the grant. This credit grant facility will be developed by the G10 bank, which is responsible for that.
In addition to that, the credit grant will serve as a portal through which digital Reals can be traded on other blockchain platforms that make use of the Celo blockchain. In addition to this, it would be utilized for the tokenization of assets in order to diversify credit risks.
In March of this past year, the LIFT project also featured a digital version of a real-focused competition. Following the completion of the challenge, the Brazilian Central Bank selected nine proposals for further research and development.