14 functions for total control were found in the code of a state-owned cryptocurrency in one of the countries

Pedro Magalhães, a blockchain expert, found features in the code of Brazil’s state-owned cryptocurrency that jeopardize user privacy. They give the regulator the right to block user accounts or reduce their balance in any way. This was reported by Binance.com/en-NG/feed/post/770 906">Binance News.

Analyzing the project’s source code, the expert found 14 functions that allow the Central Bank of Brazil to freeze and unfreeze accounts, as well as credit and debit funds, withdraw CBDC, and even destroy coins in the selected storage.

Magalhaes drew the community’s attention to the fact that the code does not specify under what conditions tokens can be blocked. The smart contracts created by the Brazilian CBDC essentially allow the Central Bank to block users' assets on its own initiative.

Brazil is one of the countries in the world that is in the process of implementing CBDC. «The initiative of the Central Bank of Brazil to introduce the digital real as an extension of the country’s physical currency is a significant step towards greater financial inclusion,» Binance News noted.

The Brazilian digital real can be exchanged on a one-to-one basis for traditional currency while maintaining the same price and value. This approach combines the stability of fiat currencies with the advantages of decentralized technology, which in turn should guarantee faster and safer transactions.

Last year in November, Brazil passed a law legalizing cryptocurrencies. The decree allows issuing licenses for cryptocurrency exchange platforms, as well as for the storage and management of cryptocurrency by third parties. To avoid incidents such as the Terraform Labs and FTX collapses, the law will require exchanges to clearly distinguish between company and user funds.