Author: Gan Jia Ci
Banco Central do Brasil (BCB), the Central Bank of Brazil, has just started a permissioned digital ledger platform for data sharing among other government entities.
The new blockchain system ensures that the information exchanged among other financial regulators are authentic and secure, some of which include the Brazilian Securities and Exchange Commision (CVM), Brazil’s Superintendency of Private Insurance (SUSEP) and National Superintendency of Complementary Pensions (PREVIC).
On Tuesday, the BCB announced that the ledger – dubbed as Information Integration Platform for Regulators (Pier) – will be used to share information on general authorisation processes for financial institutions, such as administrative sanctioning processes, conduct of institutions’ employees and the corporate control of entities managed by the BCB. Information that is not within the realm of administrative sanctioning processes is also allowed to be shared if entities share mutual interest.
Pier was established by the BCB’s IT department (Deinf), and will be utilised to eradicate the hierarchical nature of traditional business models and help regulators sidestep centralised institutions during communication using blockchain technology. In addition, it will restrict third parties from meddling with the data by storing every data request using cryptographic signatures.
Pier is currently in alpha testing and is expected to go live at the end of the year.
Aristides Cavalcante, deputy head of Deinf, explained the rationale for blockchain adoption,
“Currently there is some exchange of information regarding authorisation 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 BCB IT system Unicad.”
He added, “Traditional business models of information exchange between several entities require a centralising entity, which ends up exercising a certain degree of operational hierarchical superiority over the remaining ones, which doesn’t necessarily reflect the institutional reality.”