Brazil Stock Exchange looking to bolster the utility of Brazil’s anticipated CBDC, the real, by using oracles
The Brazilian Stock Exchange, which offers trading of Bitcoin Exchange Traded Funds, is looking to provide oracles, which are external smart contract-based data sources, to connect to Brazil’s anticipated CBDC, set to pilot in 2023. The crypto Exchange Traded Fund is one of the few stock exchange listings in the world, after Canada and Malaysia.
One of the benefits it could bring, according to Luis Kondic, the general manager of listed products and data at the Brazilian stock exchange, is automatic profit distribution for shareholders based on Oracle inputs from the exchange. Payments to suppliers in a supply chain and automatic debt settlement are other possible applications, according to a statement made during an online Brazilian CBDC event on Thursday, 30 September 2021.
Importance of high-quality data from oracles
Smart contracts are pieces of code that sit on the blockchain that react when certain events occur. The oracles can feed the smart contract data from the world, and the smart contract can be programmed to execute a specific action based on whether the data exceeds a pre-specified threshold. There is no need for an escrow in such situations. The success of using oracles depends crucially on whether the source of data can be trusted to be reliable, and secure, and ensuring security requires significant capital investment. It is best for nodes providing data to smart contracts to receive their data from data aggregators, and be able to secure such data via secure credential verification by the data aggregator, through use of the aggregator’s proprietary Application Programming Interface (API).
Nodes that do not have the capability of managing connections to proprietary APIs will often find themselves connecting to free or pirated, low-quality APIs that are not legally bound to provide verifiable data.
Interesting use cases beginning to surface with oracles
Talks around developing a Brazilian CDBC began in 2020. The head of the central bank announced in the second quarter of 2021 that they had been working on modernizing the financial system in Brazil and that a new digital currency was a natural progression from that.
Other central banks, including the Reserve Bank of New Zealand, have demonstrated potential uses for oracles and smart-contracts with a CBDC, for rent and bill payments.
Cardano recently partnered with Chainlink as its oracle provider. Many DeFi applications are set to benefit from the data provided by oracles, and Chainlink is a specialist high-quality oracle provider. A specific use-case for decentralized apps is aggregating weather data for fintech companies to enable parametric insurance in Sub-Saharan Africa.
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Original Source: Be In Crypto Brazil Stock Exchange Looking to Provide Oracles for CBDC