Brazil to Launch Drex CBDC in 2025 Shifting Away From Blockchain

Brazil’s central bank is preparing to launch its much-anticipated central bank digital currency (CBDC), known as Drex, in 2025. A significant development in the project is the decision to move away from a blockchain-based architecture, marking a shift in the technical strategy underpinning the initiative. The Drex CBDC is part of Banco do Brasil’s broader digital modernization agenda and is expected to facilitate both retail and wholesale transactions. The project has progressed through a proof-of-concept (PoC) phase and is now in the final stages of development [1].

This move signals a recalibration in the design priorities of the Drex CBDC, with greater emphasis on interoperability, scalability, and seamless integration with Brazil’s existing financial infrastructure. The country’s approach aligns with global trends where central banks are exploring a range of technologies beyond blockchain, including distributed ledger systems, while also adapting solutions to fit national needs. The Drex CBDC will operate using a two-tier system, with the central bank responsible for issuing the digital currency and commercial banks tasked with distributing it to end users [1].

The project has also sparked interest due to its exploration of programmable money features, such as smart contracts and conditional payments. These innovations could allow for more advanced financial services, including time-based or condition-based transfers, potentially positioning Brazil as a leader in CBDC experimentation in Latin America and beyond [1].

Brazil’s choice to abandon blockchain highlights the ongoing debate around the use of decentralized technologies in CBDCs. While blockchain offers benefits such as transparency and immutability, it also presents challenges in terms of complexity and scalability. By adopting a more centralized architecture, Brazil may be able to streamline operations and reduce technical barriers, which could aid in large-scale adoption. This strategic shift may serve as a case study for other countries grappling with the trade-offs between decentralization and operational efficiency [1].

The timing of the Drex CBDC’s launch places Brazil within a rapidly expanding global movement toward digital currencies. By July 2025, 109 central banks were actively exploring or piloting retail CBDCs, reflecting a global acceleration in the development of digital monetary systems [2]. Brazil’s entry into this space could support broader regional efforts to modernize financial infrastructure and potentially improve cross-border payment systems, especially as neighboring countries also experiment with similar solutions [2].

Security and compliance remain central to the Drex CBDC’s design. The system is expected to include digital identity verification and know-your-customer (KYC) protocols to prevent misuse. Privacy will be addressed through pseudonymity, though full anonymity is not anticipated due to the regulatory and compliance requirements in place [1]. These safeguards aim to strike a balance between user privacy and the need for transparency in digital transactions [1].

The development of the Drex CBDC is emblematic of a larger trend in which central banks are refining their strategies to achieve specific national objectives, such as financial inclusion, improved payment efficiency, and enhanced monetary policy flexibility. As Brazil moves closer to the 2025 launch, the Drex could influence the trajectory of fintech innovation in the country and serve as a model for other nations considering similar digital transformation paths [1].

Source:

[1] Kiffmeister’s Fintech Daily Digest (20250806)

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[2] Jurisdictions Where Retail CBDC Is Being Explored (July 2025)