Local media reports that several companies, including Microsoft and EY, have reduced the number of employees working on drex-related solutions. This reduction is due to the central bank’s lack of support for these initiatives during the second phase of the CBDC pilot.
Brazilian CBDC Pilot Drex Affected by Company Withdrawals Following Resource Cutbacks
Drex, the Brazilian central bank digital currency (CBDC) pilot, is facing headwinds as the process has slowed its development due to a reduction in the level of resources destined for the project.
According to Valor Economico, two of the largest companies involved in designing the privacy solution for the project, Microsoft and EY, have recently reduced the manpower directed to these efforts. The impasse has to do with the recent behavior of the central bank regarding the closure of the second phase of the drex pilot without approving any of the projects presented by participants.
Drex is at a standstill after none of the privacy proposals, that need to guarantee the secrecy of transactions while allowing regulators to scrutinize them, had fulfilled the requirements of the central bank in this regard.
Valor Economico reports that EY, which is currently helming the Starlight privacy project, lost three people involved in developing this solution. Meanwhile, Microsoft has also reduced its involvement in its ZKP Nova privacy proposal after spending large resources on it last year. However, ZKP Nova will continue to be tested and supported by Hamsa, a Microsoft partner.
Since the last report issued in February, which detailed that none of the privacy solutions presented by several vendors had satisfied the high conditions established by the bank, there have been no public institutional statements on drex’s future.
Rogerio Lucca, executive secretary of the central bank, recently noted that the team behind drex was still studying the project’s future. “Based on the results of the tests that are being carried out, the technical teams are currently discussing possible future steps for the project,” he stated, without disclosing the tests’ results.
Read more: Central Bank of Brazil: CBDC Privacy Problem Still Unresolved
Read more: Brazilian CBDC Pilot Postponed to 2025 Due to Inefficiency of Privacy Solutions
