Drex, the Brazilian digital real, is not ideal for investment and faces several challenges regarding value and security. Unlike independent cryptocurrencies, Drex is a government-backed digital currency and will function as a stablecoin tied to the value of the real. This means that it will be highly controlled by the Central Bank and will have the same problems as the physical real: no collateral and direct dependence on the decisions and integrity of politicians and economic policy.
1. No Potential for Appreciation: As a stablecoin, Drex will not float freely in the market, which limits the possibility of gains through appreciation. It simply represents the value of the real and follows its variations, so there will be no profit from appreciation as in traditional cryptocurrencies or even fiat currencies with free trade.
2. Centralized Control and Blocking: Drex raises concerns about state control, as it will allow the Central Bank to monitor all transactions, blocking or restricting amounts in cases of legal disputes or tax issues. This level of control means that the user is subject to constant oversight, taking away the flexibility that a cryptocurrency investor usually expects in their portfolio.
3. Risk of Unforeseen Measures: As a government digital currency, Drex may be subject to abrupt regulatory changes, with the Central Bank imposing transaction fees, money expirations, or even limiting its use in certain areas or for certain products. This poses a high risk for those thinking of keeping their funds safe or in long-term investments.
4. Dependence on Government Decisions: The value and security of Drex depend on the policies and stability of the Brazilian economy. In times of economic crisis, the government may need to intervene in the currency, applying taxes or implementing additional controls for collection, which directly interferes with the privacy and financial freedom of users.
Thus, Drex does not have the same characteristics as other decentralized cryptocurrencies and does not offer significant advantages for investment. Those seeking protection against inflation or capital appreciation will find better performance in traditional cryptocurrencies such as Bitcoin and Ethereum, which operate independently of any direct government control.
