Cryptocurrency experts question Drex’s privacy. They argue that Brazil should prioritize the adoption of stablecoins linked to the real instead of CBDC.
Experts have raised concerns about centralization and excessive state control in BeInCrypto. Although Drex is presented as an innovative step in the modernization of the financial system, legal experts point out that its implementation could compromise the privacy and financial autonomy of the population.
Centralization and control of the BC are a concern
For Pedro Torres, a partner at Sydow e Torres Advogados Associados, a possible centralization of Drex would allow the Central Bank to monitor and even restrict transactions. This raises concerns about users’ financial freedom and privacy.
The BC itself has already confirmed that the “Digital Real” will have features that will allow the freezing of amounts held by users of the digital version of the Brazilian currency, evidently following the legal prerogatives that it already has when there are legal proceedings, it points out.
Torres, who has a master's degree in Blockchain and Digital Currencies, states that this concept goes against the initial principles of decentralization, the ideological basis, for example, of Bitcoin.
Critics of Drex argue that its implementation will centralize financial control in the hands of the State and, consequently, compromise the privacy and freedom that decentralized cryptocurrencies, notably Bitcoin, seek to promote: while Bitcoin emerged as a response to the centralization of the traditional financial system, seeking to offer a decentralized alternative that is resistant to government control or any central entity, CBDCs, on the other hand, are designed centrally, offering monetary authorities or the government of the moment a way to monitor and regulate the financial transactions of individuals in a given economy, complete.
Read more: What is a Stablecoin? A Beginner’s Guide
National stablecoin could offer practicality without state control
On the other hand, the creation of a national stablecoin linked to the real could offer the same security and efficiency benefits as Drex, without the centralization of state control, according to Spencer Sydow.
A PhD in Law from the University of São Paulo, the specialist highlights that this model could also be developed more quickly and with less regulatory impact.
The Brazilian model, which raises questions about the government's ability to maintain a high degree of supervision and management over digital currency, contrasts, for example, with the approach of the United Arab Emirates, a country notoriously known for its evolved crypto ecosystem and for being a pioneer in several measures involving digital assets, which chose to develop a private stablecoin linked to the dirham (AED), explains the jurist, who is a partner at the law firm Sydow e Torres Advogados Associados.
For the expert, the discussion is not about the need to modernize the monetary system. Instead, the debate is about innovating in a way that preserves citizens' autonomy and freedom.
Read More: Discover the best stablecoins for October 2024
Stablecoins are not designed to operate outside the State and regulation, but to offer greater flexibility and autonomy to the user, who has the option of using them or not. Any transactions would be publicly recorded on the blockchain, preserving the relative anonymity of the user, as is currently the case with
blockchain do Bitcoin e com a Ethereum, completa.
The article For jurists, Brazil should adopt stablecoin instead of Drex was first seen on BeInCrypto Brasil.
