Developer Claims Brazil’s CBDC Pilot Code Enables Freezing and Reducing Funds

8:24 am
July 11, 2023
Featured image for “Developer Claims Brazil’s CBDC Pilot Code Enables Freezing and Reducing Funds”

A blockchain developer claims to have reverse-engineered the source code of Brazil’s pilot central bank digital currency (CBDC) and discovered functions that would allow a central authority to freeze funds or reduce balances. The developer argues that these functions could have potential benefits. The source code of Brazil’s Real Digital pilot project was posted on GitHub on July 6, and it was explained at the time that the project is intended for use only in a test environment and that the architecture may undergo additional changes.

Pedro Magalhães, the developer who reverse-engineered the code, found functions in the code that include the ability to freeze and unfreeze accounts, increase and decrease balances, move digital currency from one address to another, and create or burn currency from a specific address. Magalhães believes that the central bank will likely maintain these functions for purposes such as secured loan functions and other financial operations on decentralized finance protocols. However, he points out that the code lacks specificity about the circumstances under which the tokens can be frozen and who holds the power to execute these functions.

The concerns raised by the cryptocurrency community about CBDCs potentially infringing on financial freedom and privacy have been echoed in this case. Many argue that these aspects should be openly discussed and exposed in smart contracts, and that they have not been done so far.

Despite the concerns, Magalhães mentioned that a CBDC could offer benefits such as traceable taxes, public inspection of resource allocations, inspecting state purchases on-chain, and strengthening transparency in parliamentary amendments.

The Digital Real pilot project is reportedly running on Hyperledger Besu, a privately operated Ethereum Virtual Machine (EVM)-compatible blockchain, meaning users will need approval from the central bank to become a node.

Summary:

A blockchain developer claims to have found functions in the source code of Brazil’s CBDC pilot that would allow a central authority to freeze funds or reduce balances. While the developer argues that these functions may have benefits, concerns have been raised about the lack of specificity and transparency surrounding the execution of these functions. The Digital Real pilot project is running on Hyperledger Besu, and users will require the central bank’s approval to become a node.

FAQs:

What is the Digital Real pilot project?

The Digital Real pilot project is Brazil’s pilot central bank digital currency (CBDC) initiative. It is meant to be used in a test environment to explore the potential of a digital version of the country’s currency.

What functions did the blockchain developer find in the CBDC code?

The developer found functions that would allow a central authority to freeze and unfreeze accounts, increase and decrease balances, move digital currency between addresses, and create or burn currency from specific addresses.

What concerns have been raised about the CBDC pilot?

There are concerns about the lack of specificity in the code regarding the circumstances under which funds can be frozen and who has the power to execute these functions. Some also worry about the potential infringement on financial freedom and privacy that a CBDC could bring.

What are the potential benefits of a CBDC?

Potential benefits of a CBDC include traceable taxes, public inspection of resource allocations, transparency in state purchases made on-chain, and strengthening transparency in parliamentary amendments.

What blockchain is the Digital Real pilot running on?

The Digital Real pilot project is running on Hyperledger Besu, a privately operated Ethereum Virtual Machine (EVM)-compatible blockchain.


Share:

More in this category ...

7:31 pm April 20, 2024

Fourth Bitcoin Halving Completed – Here Are The Implications

Featured image for “Fourth Bitcoin Halving Completed – Here Are The Implications”
7:29 pm April 20, 2024

TRON traders making an allowance for TON and Bitbot amid SEC lawsuit towards Justin Sun

Featured image for “TRON traders making an allowance for TON and Bitbot amid SEC lawsuit towards Justin Sun”
2:42 pm April 20, 2024

Probable Root Cause: Accelerating incident remediation with causal Computational Intelligence 

Featured image for “Probable Root Cause: Accelerating incident remediation with causal Computational Intelligence ”
12:15 pm April 20, 2024

Telegram to tokenize emojis and stickers as NFTs on TON blockchain

Featured image for “Telegram to tokenize emojis and stickers as NFTs on TON blockchain”
7:31 am April 20, 2024

Relay Chain Replacement And 10M DOT Prize Incentive

Featured image for “Relay Chain Replacement And 10M DOT Prize Incentive”
5:03 am April 20, 2024

Hedgey Protocol loses $44.7M in twin cyber assaults

Featured image for “Hedgey Protocol loses $44.7M in twin cyber assaults”
3:03 am April 20, 2024

The adventure to a mature asset control machine

Featured image for “The adventure to a mature asset control machine”
7:28 pm April 19, 2024

320 Million USDT Inflow Could Ignite Price Surge

Featured image for “320 Million USDT Inflow Could Ignite Price Surge”
3:24 pm April 19, 2024

Live from TOKEN2049: Telos broadcasts Ethereum Layer 2 partnership with Ponos Technology

Featured image for “Live from TOKEN2049: Telos broadcasts Ethereum Layer 2 partnership with Ponos Technology”
2:39 pm April 19, 2024

JPMorgan CEO calls Bitcoin a ‘Ponzi Scheme’ regardless of JPMorgan’s involvement in Bitcoin ETFs

Featured image for “JPMorgan CEO calls Bitcoin a ‘Ponzi Scheme’ regardless of JPMorgan’s involvement in Bitcoin ETFs”
7:30 am April 19, 2024

BNB Price May Have Another Chance For A Bullish Streak: Here’s How

Featured image for “BNB Price May Have Another Chance For A Bullish Streak: Here’s How”
3:44 am April 19, 2024

Getting in a position for synthetic common intelligence with examples

Featured image for “Getting in a position for synthetic common intelligence with examples”
12:15 am April 19, 2024

Injective and Jambo companion to deliver mobile-based DeFi to tens of millions in rising markets

Featured image for “Injective and Jambo companion to deliver mobile-based DeFi to tens of millions in rising markets”
7:29 pm April 18, 2024

Successful Beta Service release of SOMESING, ‘My Hand-Carry Studio Karaoke App’

Featured image for “Successful Beta Service release of SOMESING, ‘My Hand-Carry Studio Karaoke App’”
4:05 pm April 18, 2024

Release date showed for brand spanking new augmented fact move-to-earn recreation, SpaceCatch

Featured image for “Release date showed for brand spanking new augmented fact move-to-earn recreation, SpaceCatch”
9:51 am April 18, 2024

NEAR Protocol positive aspects as KangaMoon approaches presale shut

Featured image for “NEAR Protocol positive aspects as KangaMoon approaches presale shut”
7:31 am April 18, 2024

LINK Price Eyes Recovery If It’s Able to Hold One Crucial Level

Featured image for “LINK Price Eyes Recovery If It’s Able to Hold One Crucial Level”
4:25 am April 18, 2024

Understanding glue data and Dedicated DNS

Featured image for “Understanding glue data and Dedicated DNS”
2:39 am April 18, 2024

Worldcoin to release a brand new Ethereum L2 community dubbed “World Chain”

Featured image for “Worldcoin to release a brand new Ethereum L2 community dubbed “World Chain””
7:34 pm April 17, 2024

Crypto Exchanges Bitcoin Supply Can Only Last For 9 Months, ByBit Report

Featured image for “Crypto Exchanges Bitcoin Supply Can Only Last For 9 Months, ByBit Report”
7:27 pm April 17, 2024

SUI spikes 11% as BTC, ETH slide: Here’s why Sui value is surging?

Featured image for “SUI spikes 11% as BTC, ETH slide: Here’s why Sui value is surging?”
4:46 pm April 17, 2024

Using dig +hint to know DNS solution from begin to end

Featured image for “Using dig +hint to know DNS solution from begin to end”
12:15 pm April 17, 2024

Puffer Finance raises $18 million in new investment spherical

Featured image for “Puffer Finance raises $18 million in new investment spherical”
7:37 am April 17, 2024

XRP Price Recovery Could Soon Fade, These Are Key Levels To Watch

Featured image for “XRP Price Recovery Could Soon Fade, These Are Key Levels To Watch”
5:06 am April 17, 2024

IBM and TechD companion to safely percentage knowledge and gear insights with gen AI

Featured image for “IBM and TechD companion to safely percentage knowledge and gear insights with gen AI”
5:03 am April 17, 2024

WOO unveils innovation hub thinking about Bitcoin’s ecosystem

Featured image for “WOO unveils innovation hub thinking about Bitcoin’s ecosystem”
9:51 pm April 16, 2024

OKX launches public mainnet for its ZK-powered L2 community “X Layer”

Featured image for “OKX launches public mainnet for its ZK-powered L2 community “X Layer””
7:40 pm April 16, 2024

Arkham Releases Top 5 Crypto Rich List

Featured image for “Arkham Releases Top 5 Crypto Rich List”
5:27 pm April 16, 2024

Ankr and Brevis coChain associate to reinforce web3 networks with ZK

Featured image for “Ankr and Brevis coChain associate to reinforce web3 networks with ZK”
5:48 am April 16, 2024

4 techniques generative Machine Intelligence addresses production demanding situations

Featured image for “4 techniques generative Machine Intelligence addresses production demanding situations”