Brazilian Financial Regulators Will Vet Companies and Political Appointees on a Blockchain

Brazil’s monetary regulators launched an information-sharing blockchain platform known as PIER on Wednesday.  

At launch, the blockchain pulls knowledge from three of Brazil’s 4 main monetary establishments: the personal insurance coverage superintendent (SUSEP), the Banco Central do Brasil (BCB) and securities regulator (CVM), PIER’s most important backers. Social safety supervisor PREVIC additionally plans to affix.

Once it does, PIER will unite Brazil’s complete monetary oversight ecosystem in what CVM known as “a vast integrated database” that accelerates the pace with which every can administer its slice of Brazil’s $1.9 trillion financial system – Latin America’s largest by far.

One use of the platform can be to conduct background checks on political appointees, based on BCB.

“Our objective is that this system promotes gains to the market, given the more efficient, safe and adequate supervision and enforcement to the new technological scenario that we are experiencing” mentioned CVM President Marcelo Barbosa in a press launch.

PIER grants bureaucrats entry to their sister businesses’ real-time data on firm sanctions, monetary efficiency and enterprise associates “in seconds,” based on BCB. It’s a simple, on-line bridge between beforehand siloed knowledge troves.

“This makes it possible to drastically reduce the time period for assessing requirements,” mentioned Daniel Bichuette, deputy head of the BCB’s Financial System Organization Department, within the press launch. 

Each company envisions utilizing PIER to enhance their oversight effectivity. For instance, BCB mentioned in a press launch that PIER can streamline its vetting of elected officers appointed to monetary establishment posts – particularly the examination of their {qualifications} and enterprise popularity. The central financial institution is charged with conducting such investigations.

CVM, for its half, mentioned PIER can increase company investigations. 

The challenge is anticipated to scale back the time it takes to conduct cross-regulator investigations in addition to the associated fee. CVM didn’t instantly reply to requests for arduous numbers. 

It’s additionally being seen as a safer technique of storing data. 

“Building PIER, using blockchain, allows the use of decentralized, tested technology whose native functionalities mean that there is no need to build the system from scratch,” BCB software program supervisor Eduardo Weller mentioned within the press launch.

Based on BCB’s description of PIER, the underlying blockchain seems to make the most of a consensus-based mechanism with a number of nodes and a digital signature system. BCB didn’t instantly reply to requests for a deeper technical overview. 

BCB will add but extra authorities databases to PIER over time, saying the system “has the potential to aggregate databases from outside the financial system,” the press launch mentioned. Possible additions embrace knowledge from: “judiciary, trade boards and international financial stability bodies.”

PIER’s debut is 2 years within the making. BCB, which first developed PIER and now administers it, disclosed PIER’s existence in June 2019. Project lead Gabriela Ruberg didn’t reply to a request for remark.

Brazil’s monetary sector usually seems to be to blockchain’s potential. Private banks have issued safety tokens on the Tezos blockchain and minted Brazilian real-backed stablecoins on Ethereum. As the PIER press launch notes: “The use of Blockchain in financial services has been growing in the market.”

The regulators, and particularly BCB, have been equally bullish. The 4 now operating PIER launched a blockchain sandbox in June 2019.

This embrace of blockchain’s technological potential is available in putting distinction to its wider views on cryptocurrency. BCB officers have likened bitcoin to a pyramid scheme. Even so, they’ve confused that the tech is completely different from its particular person purposes. 

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