Brazil’s CBDC Experiment: Central Bank to Use Digital Currency Data for Rate Decisions

Big Brother meets monetary policy—Brazil’s central bank is turning its CBDC into a crystal ball for interest rates.

The plan? Harvest real-time spending data from the digital real to fine-tune hikes and cuts. Because why rely on lagging indicators when you can surveil every transaction?

One problem: if the data’s too good, will policymakers finally admit they’ve been guessing all along?

Real-time ledger data for rate decisions

The initiative extends the bank’s strategy of supplementing survey and banking system indicators with on-chain evidence. 

Videira outlined a workflow in which anonymized Drex data passes through internal filters, merges with wholesale settlement FLOW on the same ledger, and appears on policy dashboards that track spending by merchant category, collateral movements, and regional trade volumes. 

When output falls below potential or liquidity tightens, the board could weigh a rate cut earlier than usual. Conversely, when spending runs hot, the same dashboards could support a quicker tightening vote. 

The executive framed the approach as an analytic upgrade rather than a delegation of policy to an algorithm.

Videira also detailed a credit access channel. Borrowers with limited bank history could authorize lenders to review their Drex cash Flow records, providing auditable evidence of income without requiring pay stubs. 

He said the central bank plans to publish a consultation paper on that model this year, noting that the ledger keeps user names off-chain while preserving transaction integrity through consensus validation.

Blockchain and AI 

The bank wants universities, startups, and public agencies to build analytics layers on Drex. Videira stated that large language models allocate a substantial portion of their computational budget to processing unstructured inputs. 

A ledger that labels fields, such as payer type and merchant code, enables the engines to proceed directly to pattern recognition. It added that agricultural agency Embrapa and public health institutes could query anonymized datasets to improve crop yield forecasts or disease spread simulations. 

The Drex pilot entered limited production in March, with 16 institutions testing tokenized public debt and deposit tokens. Full rollout depends on congressional approval of the proposal introduced last month. 

Videira closed by noting that policy ownership remains with the monetary board, but the transaction LAYER belongs to society.