Drex will reduce paper money printing, says Campos Neto

In a conversation in the Federal Senate last Thursday (10), the President of the Central Bank of Brazil, Roberto Campos Neto, stated that the new digital Real, called Drex, will not soon end printing paper money, although it should accelerate the decrease in expenditure over the years.

In the conversation with the Senate, Campos Neto spoke a lot about the Brazilian central bank’s plans to digitize transactions. For example, Pix is ​​​​a tool that has already been recognized as successful by the municipality.

Going forward, the development agenda sees Pix go hand-in-hand with Drex. Still, the digital currency should not pass directly “through the hands” of banking customers, as access is fully controlled by Bacen.

It only allows banks and regulated institutions to manipulate the Drex coin, tokenize their own coins and then make them available to customers. The new currency is expected to arrive in Brazil at the end of 2024.

“Drex is going to reduce the printing of paper money, but it must not stop with physical money yet,” says Campos Neto

Asked about inflation in Brazil, the autonomy of the Central Bank and even a possible end to revolving credit cards, Roberto Campos Neto spoke and answered questions from several senators in his participation.

But some questions still related to how the central bank plans to change Brazilian transactions. This is because many worry that in a country with millions of people unbanked, or even without access to the internet, Bacen plans to implement a new digital currency and eliminate cash for good.

According to the Senate Agencyquestioned by Senator Angelo Coronel, the Central Bank president said the digitization of currency through tools such as PIX and the recently launched Drex tends to reduce cash circulation.

“I believe that with the card, with Pix and now with Drex, the trend is to further reduce this circulation. I ask President Roberto Campos: Is there a prognosis that paper money will stop circulating or will it never stop circulating?the senator asked. In response, the BC president said he sees a projection of physical money falling, while digital payments are growing.

“One of the reasons we have a big economy is that we don’t have to spend so much time and money printing paper money. On the other hand, we spend more on technology. PIX has maintenance costs that go up because there are 140 million transactions per day. When this happens, the roll tends to decrease. If it ceases to exist, it is difficult to make that prediction.”

Data shows that the volume of currency in circulation in Brazil is R$285 billion, i.e. R$10 billion less than verified in 2022.

Senator was concerned about the growth of Pix scams

While the Central Bank of Brazil is betting on the growth of digital payments, a part of the population is still concerned about the security of such centralized platforms.

On Pix, for example, Senator Chico Rodrigues (PSB-RR) asked Roberto Campos Neto whether the Central Bank is considering measures to strengthen the security of these transactions. He expressed concern about the increase in the use of scams through this system, also targeting the most vulnerable people.

The senator also wanted to know how the new digital currency announced by the institution this week, the Drex, will aid in the absorption of Brazilians, giving them access to the digital currency.

In response, Campos Neto said that the BC has suggested some preventive measuressuch as guiding customers to tailor the system to their interests, and routinely, encouraging blocking of some operations due to time and transaction values.

In addition, BC has teamed up with other financial institutions to track the “orange bills” receiving operations through Pix that are being targeted by a coup. “There is a coup only because there is a receiving account,” Campos Neto argued.