Brazil Abandons Blockchain For Its Drex CBDC Project

Key Points

1. Drex, originally a blockchain-based CBDC project, will no longer use decentralized technology, though it may revisit blockchain if future use cases require it.

2. The project faced the 'Drex Trilemma'—balancing privacy, scalability, and programmability within a permissioned blockchain environment—without a viable solution.

3. Factors influencing the decision include a major hack, leadership changes at the Central Bank, and the U.S. example of avoiding blockchain for CBDCs.

4. The Drex team struggled with privacy solutions, and critics argued that the project underestimated the complexity of blockchain challenges.

5. Some industry experts suggested alternative technologies like Hyperledger Fabric might have been more suitable for Drex's needs.