Deadline initiated for submitting proposals under the Drex Pilot’s second phase

Between October 14 and November 29, 2024, proposals can be submitted for the second phase of the Drex Pilot.

This deadline is in line with Resolution BCB 423/2024, published by the Central Bank of Brazil (“BC”) on September 10, 2024, which establishes regulations and procedures for the public call on business case testing proposals, under the second phase of the Drex Pilot. This regulation also provides for the powers needed so that the Drex Pilot Executive Management Committee (“CEG”) can operate.

Proposals will be assessed based on criteria such as interest and compatibility with the Drex Pilot’s objectives. The CEG will be responsible for selecting proposals.

Key points of the regulation

• There is no initial limitation as to the number of business cases that can be selected for testing under the Drex Pilot.
• The number of proposals selected will be determined based on the entries received as well as BC’s technical and operational capacity.
• Proposals will be assessed according to the criteria and procedures provided for in the Drex Pilot regulations, attached to Resolution BCB 315/23.
• Institutions that operate in the financial market can participate as testers of the proposed business model.
• Business cases must be described in no more than five pages, including details on positive impacts, privacy requirements, testing methodology, and legal or regulatory impediments.
• The CEG can request additional information during the selection process.
• Each selected participant will assign a technical representative to manage their team and carry out the necessary discussions.
• New participants can apply to become members by submitting the Participation Agreement.

The second phase of the Drex Pilot represents a significant advance in implementing the Brazilian digital currency – known as Drex. The new regulations and procedures aim to increase the project’s transparency and efficiency, thus providing a clearer and more predictable environment for financial institutions. The public call, aimed at receiving business case proposals, is an opportunity for financial institutions to innovate and contribute to the development of Drex. Proposals can be submitted by email to piloto.drex@bcb.gov.br.

Demarest’s Banking and Finance team is available to provide any further clarifications on the topic as may be necessary.