“We are looking into it and determining the best ways to interact and participate in this ecosystem,” said a B3 executive.
Brazil Stock Exchange (B3), one of the few exchanges in the world trading Bitcoin (BTC) exchange-traded funds, is looking into ways to provide data inputs for the country’s central bank digital currency, or CBDC.
According to Luis Kondic, B3’s managing director of listed products and data, the stock exchange is considering providing oracles to bridge external data with Brazil’s planned CBDC, the digital real. The executive spoke at a CBDC-related online event hosted by the Central Bank of Brazil on Thursday, according to Cointelegraph Brasil.
“We are taking a look at it and determining the best ways to interact with and participate in this ecosystem. However, I believe that this is something that we need to evolve and move forward with in order to meet the future needs of this programmable cash payments system,” Kondic said.
Oracles are an important component of smart contracts, as they provide data feeds from external sources to execute smart contracts under specific conditions. According to Kondic, smart contracts have the potential to provide several benefits to the Brazilian CBDC, such as automatic profit distribution based on B3’s oracle inputs.
“There are numerous applications,” the executive explained. “For example, you can schedule money to be distributed among shareholders automatically based on the company’s profits; schedule money for automatic settlement of issuance and payment of receivables; or pay suppliers automatically within a distribution chain.
Other banks, such as the Reserve Bank of New Zealand, have also proposed CBDC smart contract applications, such as automatic execution of rent or bill payments.
The announcement comes as the Brazilian central bank moves forward with CBDC development, having formed a dedicated group to study the crypto industry in October 2020. As part of its CBDC investigation, the Central Bank of Brazil issued a presentation on September 9 stating that the authority is studying potential smart contracts and decentralized finance applications.
After completing a proof-of-concept in 2022, the regulator expects to launch the first digital real pilots in 2023.