CVM Chief: Brazilian CBDC Drex to ‘Kill’ Many Cryptocurrencies

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João Pedro Nascimento, president of the Brazilian Securities and Exchange Commission (CVM), believes that drex, the Brazilian central bank digital currency (CBDC), will “kill” many cryptocurrencies. While established cryptocurrencies like bitcoin and ethereum will keep being used in the country, drex will impact the adoption of smaller and less-known crypto projects, Nascimento stated.

CVM President: Brazilian CBDC Drex to End Lesser Cryptocurrencies

The Brazilian government has high hopes for the future of drex, the Brazilian central bank digital currency (CBDC). João Pedro Nascimento, the head of the Brazilian Securities and Exchange Commission (CVM), stated that the issuance of drex will kill many cryptocurrencies due to several factors.

During a financial symposium, Nascimento stated that while larger and already established cryptocurrencies will be safe, drex will sip away attention from lesser-known cryptocurrency projects by offering many of their functionalities in just one token.

He clarified:

I’m not talking about Bitcoin, but drex will reduce the attractiveness of smaller cryptocurrencies.

This is because drex aims to include many of the advantages that cryptocurrencies offer today, like smart contracts programmability and interaction with existing structures due to its Ethereum-compatible origins, combined with the speed and practicality of developed distributed ledger technologies (DLT). According to earlier reports, drex is expected to be launched next year.

A Different Approach to Crypto Regulation

While other regulators have adopted a hard stance against cryptocurrencies, the CVM promotes a more flexible approach. Nascimento emphasized that while technological innovations need regulation, this should be done inclusively, identifying opportunities to integrate these technologies instead of stifling innovation.

Nascimento explained:

Every time human beings have tried to stop innovations, they have failed. I understand that we have to see opportunities in new things and try to bring these new things to market adherence.

Nascimento defended the rise of a regulated cryptocurrency economy, bringing all the “good” actors of the sector under the law. The alternative to this includes pushing them into a marginal market where risks derived from their actions will be generated without the opportunity to control possible negative occurrences like money laundering and tax evasion.

Finally, he stated that his approach was also shared by significant figures of the Brazilian government, including Ricardo Leal, president of the Financial Activities Control Council (COAF), and Economy Ministry Executive Secretary Dario Durigan.

What do you think about the statements of CVM president João Pedro Nascimento on drex and his stance on the upcoming regulation of the Brazilian cryptocurrency economy? Tell us in the comments section below.