Brazil's CBDC Project Drex Faces Challenges Amid Resource Constraints

According to PANews, Brazil's Central Bank Digital Currency (CBDC) pilot project, Drex, is encountering difficulties due to reduced resources, leading to a slowdown in progress. The two major companies involved in designing privacy solutions for the project, Microsoft and Ernst & Young, have recently decreased their workforce dedicated to these efforts. This impasse is linked to the central bank's recent actions, which concluded the second phase of the Drex pilot without approving any submitted projects. The privacy proposals, which need to ensure transaction confidentiality while allowing regulatory review, have not met the central bank's requirements, causing the Drex project to stall. Ernst & Young, responsible for the Starlight privacy project, has lost three team members involved in developing the solution. Meanwhile, Microsoft, after significant resource investment last year, has reduced its participation in the ZKP Nova privacy proposal. However, Microsoft's partner, Hamsa, will continue testing and supporting ZKP Nova. Rogerio Lucca, the central bank's executive secretary, recently noted that the team behind Drex is still exploring the project's future. He stated, "Based on ongoing test results, the technical team is currently discussing possible future steps for the project." However, he did not disclose the test outcomes.