The future of physical cash is at stake as more and more countries look at ways to abolish its use. In Brazil, the discussion about Drex, a digital currency planned by the Central Bank, is gaining momentum, as is support for the project. However, one congresswoman has decided to join the fight and try to prevent the implementation of Drex as a CBDC.
This is Federal Deputy Julia Zanatta (PL/SC), who created Bill No. 3,341/2024. According to the deputy, the PL does not aim to prevent the progress of Drex, but rather to prevent the extinction of paper money. With this, digital currency would not have a monopoly as a means of exchange in Brazil.
Last Thursday (24), Zanatta gave an interview to Morning Cripto, a daily channel hosted by Edilson Osório Jr, founder of the startup OriginalMy. During the interview, the deputy spoke about the risks of Drex, her opinion about it and also explained more details about her project.
At the beginning of the interview, Congresswoman Júlia Zanatta explained the origin of her fight against Drex in a project with the opposite content to hers. PL 4068/2020 created by Congressman Reginaldo Lopes (PT/MG) foresees the extinction of paper money in five years, aiming at a complete transition to Drex.
This PL has not yet been approved, but has received considerable support among deputies – with the exception of Zanatta. Concerned about the impacts of this measure, the deputy filed PL 3,341/2024, which prohibits the elimination of physical money.
Drex is a Central Bank Digital Currency (CBDC), similar in concept to other state-owned digital currencies around the world. It began shortly after the implementation of Pix in 2020 and aims to revolutionize the financial system.
In its current format, the Brazilian project does not yet foresee general use, but only as an alternative payment system between banks. However, the Central Bank of Brazil (BC) hopes that Drex will evolve and become a currency in common use.
The project itself does not impede the development of Drex, which is already in its second phase, but it goes against Lopes' proposal to end physical money. But Zanatta said he disagrees with the implementation of Drex as it exists today.
“The more I read about DREX, the less I want it to be implemented (…)”, said the deputy.
Osório questioned the long-term risks of digital currency. “Today we are in a democracy, but tomorrow, with the transition of government, we don’t know if this type of power will be used well or poorly,” he said.
The deputy's biggest concern is the control that Drex provides to the state. Zanatta says that with the new currency, the government will be able to track in detail each citizen's transactions, eliminating anonymity and potentially restricting freedom of choice.
This control would be in the hands of the Central Bank, an agency that could, in the event of a crisis or change of government, “block balances and even burn amounts directly from users’ accounts.” In fact, several directors linked to Drex admitted that the system could include mechanisms such as freezing funds and locks against withdrawals.
The biggest example of CBDC implementation is Nigeria, mentioned by Osório during the interview. In the country, the government imposed severe limitations on the use of physical money to encourage the use of the e-naira, which generated a series of protests and clashes in the country.
“In practice, the poorest and most unbanked — those who do not have regular access to banking services — have been hit hard. Without physical money, many are unable to carry out basic transactions,” said Osório.
Zanatta followed the same line and highlighted the debanking in Brazil, including in rural areas where access to technology is limited. These areas could suffer more from any eventual control established by Drex.
Why not ban it?
But if Drex poses so many risks, why does the congresswoman just want to prevent the end of physical money? Why not try to abolish Drex altogether?
The congresswoman acknowledges that perhaps the ideal would be to prevent the implementation of DREX altogether, but that her bill represents a first step. Zanatta stated that several congressmen accused her of being a conspiracy theorist and “defending backwardness” by supposedly trying to prevent the creation of DREX, but she stated that she wants to preserve the citizen’s choice.
“If the future is control, I prefer to live in the past,” says Julia, reinforcing that the fight for freedom is at the heart of her project.
The deputy emphasizes, however, that none of this will be possible without the mobilization of the population. According to her, popular pressure is crucial for more deputies to become aware of and support PL 3341.
“I am just a deputy, and we need the support of the population to give visibility to the project,” she explains, encouraging the public to pressure other parliamentarians and ask them to “pay attention to PL 3341 and the project that prohibits the end of physical money.”
