Brazil’s CBDC Pilot Code Can Freeze or Reduce Your Funds
The source code of Brazil’s Real Digital pilot project, released on GitHub on July 6, has sparked controversy due to its provisions for freezing or reducing funds.
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While the pilot project is still in a testing phase and subject to potential changes, blockchain developer Pedro Magalhães discovered code that allows for actions such as freezing and unfreezing accounts, adjusting balances, transferring Real Digital between addresses, and creating or burning tokens from specific addresses.
Pedro Magalhães expressed concern about the lack of clarity regarding the circumstances under which these actions can be executed and who has the authority to carry them out. He emphasized the importance of transparency and public discussion about these functionalities, which have not yet been adequately addressed.
The central bank of Brazil is expected to maintain these functions to facilitate secured loan operations and other financial activities on decentralized finance protocols, according to Pedro.
The cryptocurrency community has raised concerns about the potential infringement on financial freedom and privacy that could arise from the implementation of a central bank digital currency (CBDC). These concerns highlight the need for careful consideration and public dialogue surrounding the development and deployment of CBDCs.
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