DREX: Brazil's central bank digital currency faces privacy questions
The Central Bank of Brazil is developing DREX, a digital currency built on a permissioned Ethereum-based network called Hyperledger Besu. Unlike decentralized cryptocurrencies, it is run by authorized banks and institutions, with the central bank retaining oversight of the system. Pilot tests revealed that, without extra safeguards, transactions could be visible to network participants, and researchers reportedly exposed balances and transfers during one trial. The bank is evaluating privacy technologies such as zero-knowledge proofs and anonymous transfer protocols, though full privacy is seen as incompatible with anti-money-laundering rules. Implementation is underway, with expansion expected through 2025 and 2026.
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