Financial regulators in Brazil are looking to use blockchain technology to vet companies and other political appointments in the country.
Blockchain Technology to Gain Massive Usage in Brazil
Regulators in the South American country launched an information-sharing blockchain platform called PIER on April 1. The blockchain platform will be used to vet companies looking to provide services in the country and to approve other political appointments.
At the time of its launch, PIER pulls data from three of Brazil’s four major financial institutions. They include; Banco Central do Brasil (BCB), the private insurance superintendent (SUSEP), and the principal backers of PIER, securities regulator (CVM). Social security supervisor PREVIC is also working on joining the platform.
When PREVIC joins the platform, PIER will bring together the entire financial oversight ecosystem in Brazil. According to CVM, PIER will become a vast, integrated database that will enhance the speed at which each of the four entities can effectively monitor South America’s largest economy of $1.9 trillion.
According to BCB, the blockchain platform can be used to carry out background checks on political appointments in the country. CVM President Marcelo Barbosa, in his press release, stated that their objective is that this system will promote gains to the market as a result of the safer, more efficient, and the adequate enforcement and supervision to the new technological scenario that exists.
The BCB added that the blockchain platform would grant bureaucrats access to their sister agencies’ records in real-time. They can see company sanctions, financial performance, and business associates within seconds of updating them. This method bridges the gap of information between the sister agencies and makes it easy for them to pull out relevant data when needed.
The deputy head of the BCB’s Financial System Organization Department, Daniel Bichuette, commented that PIER makes it possible to decrease the time period for assessing requirements drastically.
Agencies to Use PIER to Improve Oversight Efficiency
Each of the agencies on the platform is looking to use the PIER platform to improve its oversight efficiency. BCB, in its press release, stated that PIER would help streamline the vetting process of elected officials appointed to financial institution positions. The blockchain platform will specifically examine their qualifications and business reputation. Meanwhile, CVM believes PIER can enhance its corporate investigations.
The PIER platform is expected to drastically reduce the time it takes to carry out cross-regulator investigations as well as cut down the costs involved. However, the CVM didn’t respond to the exact number expected to be involved in both cases.
BCB software manager Eduardo Weller stated that developing PIER as a blockchain platform enables the use of decentralized, tested technology whose essential functions make it unnecessary to build the system from scratch.
According to BCB’s description of the platform, PIER’s underlying blockchain utilizes a consensus-based mechanism with numerous nodes and a digital signature system. However, BCB didn’t provide a further technical overview of the PIER platform.
BCB is planning to add more government database to PIER in the future. The regulator stated that the system has the potential to bring together databases from outside the financial sector. They are looking to add data from the judiciary, trade boards, and international financial stability bodies.