Brazil is the latest country to look at digital currency as legal tender. The Lithosphere cryptocurrency platform developed by KaJ Labs, a Seattle blockchain firm, initiated discussions with the Central Bank of Brazil to partner on the country’s digital real roll out.
Brazil has been exploring central bank digital currencies (CBDC) since 2020. CBDCs are the digital version of a nation’s fiat currency that’s issued by its central financial authority. Banco Central do Brasil (BCB) presidents indicated that the central bank is “making progress” on plans to digitalize the Brazilian real and could release Central Bank digital currency as early as 2022, provided the infrastructure and necessary conditions for implementing digital currency are met.
The country’s PIX instant payment system launched in Nov. 2020. The PIX system enhances the speed of interbank payments and makes them less expensive for individuals, businesses and government entities. PIX enables users to transfer and receive payments via smartphone in seconds, even on non-business days. It has the potential to form the backbone for a larger CBDC, fostering financial inclusion, increased security, convenience, efficiency, innovation, and financial tools for those without traditional bank accounts.
Lithosphere will assist with distributed ledger technology (DLT), tokenizing the bonds and the wholesale payment token using its custom blockchain interoperability solutions. The trial with the Central Bank of Brazil will explore both forms of tokenized money to settle debenture or bond transactions, to be issued, settled and cleared on a permissioned blockchain.
“KaJ Labs will focus on how interoperability could be achieved between various CBDCs and other DLT solutions,” said KaJ Labs founder, Joel Kasr.
Roberto Campos Neto, president of the Central Bank of Brazil, said the country must have an efficient, instant and interoperable payment system that can be convertible internationally to implement digital currency. Interoperability among multiple wallets is just one of the Lithosphere Network’s built-in benefits.
The KaJ Labs Foundation is committed to furthering social responsibility causes as part of its philosophy. It donated a total of $95 million toward Ripple’s legal defense fund vs. SEC and other organizations facing similar lawsuits. The SEC alleges that Ripple Labs offered an unregistered currency or an illegal IPO.
Ripple won against many of the allegations set forth by the SEC, but several pending motions have been entered that haven’t been ruled upon yet. The earliest that a ruling could be forthcoming is in March 2022, but that doesn’t appear likely if the court rules on the pending motions after the discovery deadline.
The technology developed by Ripple featured a network for fast, low-cost cross-border money transfers in the form of XRP cryptocurrency. The digital coin paved the way for innovations such as Lithosphere, the first blockchain technology to be powered by AI and Deep Neural Networks (DNNs) for intelligent smart contracts and a novel Myriad Distributed Key Management (MDKM) scheme for key management.
Lithosphere has earned a reputation as the future of cryptocurrency by experts in the financial industry and technology visionaries. The trial to partner with the Central Bank of Brazil to launch digital real CBDC marks another momentous achievement in the company’s evolution, innovation and importance within the cryptocurrency environment.