Brazil’s central bank digital currency, Drex, leverages smart contracts to balance compliance and innovation. Built on Hyperledger Besu, Drex automates transactions like real estate and trade finance, ensuring efficiency and security through blockchain. Smart contracts execute only when predefined conditions are met, reducing reliance on intermediaries and enhancing trust. To ensure compliance, Drex adheres to anti-money laundering (AML) and know-your-customer (KYC) regulations, using cryptographic solutions like zero-knowledge proofs to protect user privacy while maintaining transparency. The Central Bank of Brazil collaborates with private entities to test third-party smart contracts, fostering innovation  fostering innovation while ensuring regulatory oversight. This approach positions Drex as a global leader in CBDC development, harmonizing financial inclusion, efficiency, and compliance.