BV Bank, a Brazilian banking leader in auto lending, is piloting the use of tokenization to manage auto financing and sales activities. The first phase of testing involves automating consumer-to-consumer car sales processes, including the delivery of tokenized money in exchange for vehicle ownership.
Brazilian BV Bank is testing a tokenization model for car sales
Last week, BV Bank, a Brazilian leader in auto lending, announced it was testing a tokenized system to automate its car sales and financing processes. The test, conducted jointly with Consensys and Parfin, providers and designers of the platform’s smart contracts, will evaluate the benefits of using tokenized money for car payments.
The first phase of the test involves using tokenized money and a digital certificate of car ownership to expedite a consumer-to-consumer car transaction in a simulated environment. The idea behind these tests is to have a working platform to expedite these operations once the Drex, the digital currency of the Central Bank of Brazil (CBDC), is released.
Brazil is the sixth largest car market in the world, with more than 10 million units sold in 2023, taking into account new and used car transactions. When the Central Bank of Brazil unveiled the official name of Digital Reality in August, one of the specific use cases mentioned was the simplification of car transactions.
Carlos Bonetti, executive director of risk and operations at BV Bank, said:
The idea is that the bank is responsible for carrying out the entire financing operation, from the simulation to the write-off of the lien and finalizing the sale of the vehicle.
Bonetti emphasized that the transparency this new tokenized system provides to the parties involved in a transaction would reduce operational and financial risks. He explained that, when implemented, this would “provide numerous customer experience benefits, including the possibility of immediate settlement of the amount due and operational simplification.”
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