The impact of digital currency on cash and Relgov
Posted: Thu Feb 20, 2025 6:13 am
The focus on implementing digital currency by the Central Bank of Brazil represents an important step towards monetary digitalization, which will also have an impact on the Brazilian economy. In addition to providing security by being part of the financial system, there is also a reduction in costs — considering the amounts spent on printing money by the Mint — and the possibility of avoiding risks in the event of a financial crisis.
However, it is important to highlight that the Digital Real will not eliminate paper money. On the contrary, the idea is for the virtual currency to be a complement and offer more options for everyday transactions. This is because even with the advancement of payment methods, cash is still the main means of payment for 60% of the population, according to the study “ Brazilians and their relationship with money ”, developed by Bacen in 2018.
The reason for this can be seen in the debanking process. According bahamas mobile database to the survey, 30% of Brazilians over the age of 15, equivalent to 45 million citizens, still do not have a bank account and 43% of this total live in the 40% poorest households. Receiving their salary in cash is the reality for 29% of the population in Brazil.
To give you an idea, even in the face of the effects caused by the new coronavirus pandemic , there was an increase in the issuance of banknotes. According to the Central Bank, by the beginning of June there were R$327.9 billion in physical money in circulation in Brazil. Before the pandemic, this value was R$254.1 billion. In other words, in the period of just over a year, there was an increase of R$74 billion in coins circulating throughout the country.
One of the reasons to justify this increase, considering the crisis, is the payment of emergency aid. According to the Institute of Applied Economic Research (Ipea) , 7 out of 10 beneficiaries of the Bolsa Família program do not have a bank account and had to resort to withdrawing money to receive the aid. In this sense, social inequality has a direct impact on the country's financial system and reveals the impossibility of ending paper money.
However, it is important to highlight that the Digital Real will not eliminate paper money. On the contrary, the idea is for the virtual currency to be a complement and offer more options for everyday transactions. This is because even with the advancement of payment methods, cash is still the main means of payment for 60% of the population, according to the study “ Brazilians and their relationship with money ”, developed by Bacen in 2018.
The reason for this can be seen in the debanking process. According bahamas mobile database to the survey, 30% of Brazilians over the age of 15, equivalent to 45 million citizens, still do not have a bank account and 43% of this total live in the 40% poorest households. Receiving their salary in cash is the reality for 29% of the population in Brazil.
To give you an idea, even in the face of the effects caused by the new coronavirus pandemic , there was an increase in the issuance of banknotes. According to the Central Bank, by the beginning of June there were R$327.9 billion in physical money in circulation in Brazil. Before the pandemic, this value was R$254.1 billion. In other words, in the period of just over a year, there was an increase of R$74 billion in coins circulating throughout the country.
One of the reasons to justify this increase, considering the crisis, is the payment of emergency aid. According to the Institute of Applied Economic Research (Ipea) , 7 out of 10 beneficiaries of the Bolsa Família program do not have a bank account and had to resort to withdrawing money to receive the aid. In this sense, social inequality has a direct impact on the country's financial system and reveals the impossibility of ending paper money.