Developer suspects Brazil’s central bank added a ‘freeze’ function to the CBDC

The creators of the digital real anticipated the possibility of freezing funds and adjusting balances. This conclusion was reached by Pedro Magalhães, according to Decrypt.

The founder of the Web3 consulting firm Iora Labs urged Brazil’s central bank to clarify the situation for the public.

The specialist cited the regulator’s API on Github. He said authorities did not rush to provide explanations.

“They generally do not engage with representatives outside the banking sector. They don’t even need to worry about public opinion,” Magalhães commented.

According to Vini Barboza, a journalist from Do Bitcoin, Brazilian authorities подтвердили the substantiation of the concerns raised by the specialist.

“According to the Central Bank, the ability to „freeze or seize sums”, stored in [this system], is protected by applicable law,” the reporter said.

Magalhães initially suggested that the option would apply only to DeFi or CeFi (centralized platforms) ‘to complete a smart-contract operation’. The Central Bank explained that the regulator could do this at any time.

Decrypt reminded that in the 1990s the president of the country «froze» the finances of all citizens for 18 months.

In Magalhães’s view, the only way to counter the central bank’s excessive control over CBDC is to inform about it on social media.

“Authorities will spare no effort to deploy the digital real. They have all the means for this. The only thing I asked for is to provide the smart-contract code so we know what the Central Bank is doing”, the specialist said.

Brazil’s regulator has planned the official launch of the CBDC in 2024. Its head Roberto Campos Neto said that the technology design would act as an incentive for banks to tokenise assets to improve efficiency.

In May 2023, the Central Bank of Brazil published the final список of participants in the pilot project for the digital real.