Developer EXPOSES Dystopian Brazilian CBDC

One developer is bringing what we already instinctually know regarding central bank digital currencies to the forefront of public attention—they’re meant for total control of the population.

Vini Barbosa shared this report on the troubling lines of code, found within the Brazilian CBDC’s stack, that will allow the central bank and the Brazilian government to ultimately shut off, restrict, and otherwise directly control every unit of currency.

Vini Barbosa dissected the not-so-shocking claims in this tweet thread:

2/ *this report was originally posted on Portal do Bitcoin (in Portuguese-BR).
→ https://t.co/igel68LzP4

Central Bank confirms discoveries made by a developer in the source code, but does not say whether functions will be kept in the final version.

— Vini Barbosa (@vinibarbosabr) July 10, 2023

4/ This audit entered the radar of a number of developers, who began to analyse the code. Finding out about a few unknown code functions.

These functions allow the controllers to make several (and relevant) changes in the data of the CBDC’s ledger, direct affecting its users.

— Vini Barbosa (@vinibarbosabr) July 10, 2023

6/ These resources can be executed by any entity that receives proper permissions from the controlling entity of the new system — i.e. the Central Bank.

Among the changes authorities could potentially make using these functions are, for example: pic.twitter.com/AT5v1rOQbK

— Vini Barbosa (@vinibarbosabr) July 10, 2023

8/ Asked by the report, the Central Bank itself also admitted the possibility of executing the functions discovered by Magalhães. pic.twitter.com/JvuhyiKLbh

— Vini Barbosa (@vinibarbosabr) July 10, 2023

10/ In the documentation shared last week, the responsible authority states that the Real Digital pilot project is intended for use only in a test environment and should not be reproduced for real operations.

— Vini Barbosa (@vinibarbosabr) July 10, 2023

12/ “Recently, I delved into the world of ABIs (interfaces) of Real Digital, a Central Bank’s initiative, with the intention of exploring possible vulnerabilities for purely didactic purposes”, says Magalhães.

— Vini Barbosa (@vinibarbosabr) July 10, 2023

14/ In a conversation with myself at Portal do Bitcoin, Pedro Magalhães explained that an Application Binary Interface (ABI) is “basically a way to interact with smart contracts on Ethereum. It is like a manual that tells how the contract can be read and written.”

— Vini Barbosa (@vinibarbosabr) July 10, 2023

16/ Based on this analysis, Pedro says it was possible to recreate the smart contract in Solidity (the computing language) used in the pilot project. This contract enables the execution of the following functions ↓ pic.twitter.com/VhKLDFAJdH

— Vini Barbosa (@vinibarbosabr) July 10, 2023

18/ 💬“What most people are going to use on a day-to-day basis is the ERC20-based smart contract to transfer value.”

ERC20 is the Ethereum (ETH) network token standard, very common in the cryptocurrency market and in the decentralized finance (DeFi) ecosystem.

— Vini Barbosa (@vinibarbosabr) July 10, 2023

https://t.co/igel68LzP4

— Vini Barbosa (@vinibarbosabr) July 10, 2023

According to Coin Telegraph:

On July 6, the source code of the digital Brazilian real pilot project was posted on GitHub portal by Brazil’s central bank. It was explained at the time that the pilot project is intended for use only in a test environment and that the “presented architecture” may be subject to additional changes.

Pedro Magalhães — a blockchain developer and founder of tech consulting firm Iora Labs — later that day claimed to have been able to “reverse engineer” the open source code of Banco Central do Brazil’s digital real, revealing functions in the code.

Pedro Magalhães, the individual who discovered the code, writes: “Vinícius Barbosa did a great job reporting on a post that detailed my latest discovery, which I had published on LinkedIn and Github. This post included source code related to reverse engineering using the ABI provided by Bacen.”

Vinícius Barbosa did a great job reporting on a post that detailed my latest discovery, which I had published on LinkedIn and Github. This post included source code related to reverse engineering using the ABI provided by Bacen.

However, seeing some of…https://t.co/deAnncsPED

— Pedro Magalhães (@pemagalhaesrj) July 11, 2023

CoinDesk had this to say about Brazil and their CBDC aspirations:

As key export economies such as Brazil embrace CBDC-based direct settlement with their trading partners, it will spur a trend of de-dollarization over the next decade. The ramifications for U.S. capital markets, for the global economy, and for geopolitical power dynamics are profound.

Brazil’s central bank is among more than a hundred experimenting with CBDCs. Others that matter for this discussion include the United Arab Emirates, Russia, Singapore and China, which is streets ahead in rolling out its electronic currency, the e-CNY. China, of course, has made no secret of its desire to reduce its dependency on dollars.

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