The Central Bank of Brazil and other financial regulators will begin using a blockchain platform for sharing information regarding the authorization of financial institutions.
The Brazilian central bank (Banco Central Do Brasil, or BCB) has announced plans for a blockchain platform intended to streamline the authorization of financial institutions, by facilitating the efficient distribution of information. The project, called the Information Integration Platform for Regulators (Pier), is a partnership between the BCB and other Brazilian financial regulators.
According to the announcement from the BCB:
“Pier enables the data exchange between the BCB and other regulators, such as the Superintendence of Private Insurance (Susep), the Securities and Exchange Commission of Brazil (CVM), and the National Pension Funds Authority (Previc).”
The information sharing between these organizations is currently handled in a fairly low-tech manner. Aristides Cavalcante, deputy head of IT for the BCB, said, “Staff from one of the institutions contact the others by letters or e-mails. Even the few queries that are automated by software still require some degree of human intervention.”
He also said the decentralized nature of the Pier blockchain makes it an ideal tool for the type of information sharing that the regulatory agencies require:
“Traditional business models of information exchange between several entities require a centralizing entity, which ends up exercising a certain degree of operational hierarchical superiority over the remaining ones, which doesn’t necessarily reflect the institutional reality.”
The launch of Pier is part of what appears to be an ongoing effort by the BCB to make use of blockchain technology. Last Fall, the BCB revealed it was testing various distributed settlement platforms, including one backed by Ethereum, and released an accompanying report.
However, BCB president Ilan Goldfajn isn’t conflating blockchain with cryptocurrency. Shortly after the report was released, he spoke out against bitcoin, declaring, “The central bank is not interested in bubbles or illicit payments.”
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