Banco do Brasil is to work with German firm Giesecke+Devrient (G+D) to test offline payments as part of pilot trials of its central banking digital currency, Drex.
The tests will explore payment use cases using the Brazilian digital currency in situations where there is no internet connection or electricity grid.
It will also enable payments to be made in crisis situations, such as power or internet outages, where cash was previously the only option.
One of the main goals of the project is to extend access to financial services to Brazilians with limited or no access to the Internet, by providing a complementary payment instrument to cash.
Cash payment is the second most used payment method in the country, behind the immediate payment method PIX, while in socialeconomic classes D and E, cash is the most used payment method.
The Central Bank of Brazil plans to launch the CBDC Drex by the end of 2024.
In previous pilot projects, like the offline CBDC trial phase of Hong Kong’s e-HKD, G+D has already tested important factors such as 'offline capability' and 'interoperability'. This includes ensuring smooth and secure transactions under all circumstances, while allowing consumers to use their preferred network and digital wallet for transactions.
Marisa Reghini, vice-president of digital business and technology at BB, says that the bank is committed to bringing financial services closer to the entire Brazilian population.
"With offline payment, we can bring ease and technology to people who have difficulty accessing the technological infrastructure," she explains. "Brazilians can benefit from the solution in their daily lives, carrying out secure transactions in local shops, for example, without the need for a bank account or the Internet."