The Central Bank of Brazil has announced a postponement of the drex pilot, Brazil's central bank digital currency (CBDC), until 2025, attributing the delay to the inadequacy of the privacy solutions proposed for the project. The new phase of the pilot, scheduled to start in July and conclude in 2025, will introduce smart contracts to support use cases suggested by external entities.

This extension of the pilot's timeline is aimed at encouraging private entities to propose innovative CBDC initiatives that expand beyond the original drex design envisioned by the central bank. Reports from local sources indicate that the primary reason for this decision is the lack of maturity in the trialed privacy solutions, which failed to meet the stringent requirements and legal considerations concerning the protection of citizens' privacy.

The Central Bank emphasized that trials involving the general population will only proceed once there is certainty about meeting the necessary privacy standards. Drex is being developed to operate within a blockchain system supported by Hyperledger Besu, presenting challenges in aligning standard transactions with Brazil's banking and tax secrecy regulations.

As a result of these privacy concerns, the issuance and testing of drex this year are deemed unfeasible, as highlighted by Fabio Araujo, the Central Bank of Brazil's digital real project coordinator. Araujo stressed the importance of finding a delicate balance between privacy and utility to create products that ensure the effective usability of digital assets. The delay in the drex pilot underscores the significance of addressing privacy issues and ensuring compliance with regulatory requirements before proceeding with broader trials involving the general public.