Brazil Seeks to Become First Country to Use Blockchain for Regulatory Purposes
The Central Bank of Brazil is developing a Blockchain platform that it hopes will strengthen supervisory information exchange between Brazilian regulatory authorities.
It is thought to be the first country in the world to legalize the sale of marijuana, so it should be no surprise that it could be the first to move on something else that others have shied away from.
We’re talking about Brazil.
This time their move involves the use of Blockchain and how the technology can facilitate the sharing of information among the country’s regulators. Specifically, Brazil’s Central Bank (BCB) has announced the development of a Blockchain data exchange platform for regulators.
The move is considered to be a major one for the South American country.
Let’s get right to it.
Pier to the rescue
The Central Bank of Brazil (BCB) and other regulators of the Brazilian Financial System will exchange information by using a Blockchain-based technology platform. This platform is referred to as the “Information Integration Platform for Regulators,” or Pier.
It’s expected to be up and running by the end of this year.
This Pier platform enables the data exchange between the Brazilian Central Bank and other regulators, such as the Superintendence of Private Insurance, the Securities and Exchange Commission of Brazil and the National Pension Funds Authority.
Initially, connected regulators will use Pier for sharing data regarding the authorization processes for financial institutions.
•information on administrative sanctioning processes
•the conduct of financial institutions’ officers, and
•the corporate control of entities regulated by the BCB,
Involved in this effort is the BCB’s IT Department, known as Deinf. In this release, Aristides Cavalcante, Deinf’s deputy, said the following:
“Currently there is some exchange of information regarding authorization processes, which are not automated yet: staff from one of the institutions contact the others by letters or e-mails. Even the few queries that are automated by software still require some degree of human intervention. Staff from the CVM, for instance, may access the information by using the Unicad.”
Why Pier and Blockchain?
Officials with the project note that Blockchain was chosen for the project because the technology it provides a horizontal network of information-sharing between the regulators connected to Pier.
Cavalcante notes the following:
“ several entities require a centralizing entity, which ends up exercising a certain degree of operational hierarchical superiority over the remaining ones, which doesn't necessarily reflect the institutional reality.”
Furthermore, Cavalcante said that the Blockchain platform records every data request using cryptographic signatures so that “it is possible to certify at any moment the authorship, and that no entity has tampered with the data, and thus guaranteeing information authenticity.”
Also, there is the matter of Blockchain not allowing for data to be deleted once it is recorded. Brazilian officials are also enamored with the technology encouraging the participating players to provide information on demand. This is possible because each player has total control over what is retrieved and how it is retrieved.
On Pier, each institution will determine what information will be available within the network. At first, the BCB expects that institutions will allow access to information relative to administrative sanctioning processes, but any participant may grant access to any information considered to be of mutual interest at any moment, according to the statement.
"Together the automation of data searching and the guarantee of both authenticity and origin of the information will yield efficiency. With Pier, any participant will be able to retrieve data almost immediately, and the platform will decrease error incidence by eliminating manual processes of data retrieval and sharing. Agility gains and fewer mistakes are expected to reduce costs."