The Central Bank of Brazil officially revealed the brand name for its central bank digital currency (CBDC) as “Drex.”
The central bank crafted the CBDC to illustrate the transformation of the national fiat currency, the real, into its digital form. The logo showcases two arrows positioned within the capital letter D to depict this. It represents the completion of transactions through its transition from blue to light green
“‘D’ and ‘r’ allude to Real Digital; the ‘e’ stands for electronic and the ‘x’ conveys the idea of modernity and connection, the use of distributed ledger technology (DLT).”
However, in July, a blockchain developer named Pedro Magalhães, who founded the tech consulting firm Iora Labs, reportedly discovered functions within the Drex code that could potentially allow a central authority to freeze funds or reduce balances. The discovery has raised concerns about the operational mechanisms of the CBDC, such as increasing and decreasing balances, moving currency from one address to another, and creating or burning digital real from a specific address.
Another concern is that the open source code to the CBDC lacks specificity about the circumstances under which the tokens can be frozen and, above all, who holds the power to execute them
“One thing is to agree with an operation and execute a DeFi operation that involves different blockchains; another completely different thing is an institution having the ability to freeze the balance on its initiative, and that’s precisely how they’ve developed the smart contracts.”
On the flipside, last year, Fabio Araujo, an economist at the Brazilian central bank noted the CBDC’s potential to mitigate bank runs in the country, offering increased stability to the financial system.
In a noteworthy development, the Central Bank of Russia unveiled the visual representation for its CBDC, the digital ruble. The logo features the international ruble symbol enclosed within a circular design. The logo is presented in four main color combinations: red and white, along with black and white options.
