According to Coindesk, Brazilian state-owned bank Banco Nacional do Desenvolvimento Social (BNDES) will issue their own Stablecoin in 2019. BNDES is one of the largest state-owned banks in Latin America.
Stablecoins are digital assets that have their price pegged to another currency. These cryptocurrencies are different since they represent the same value as the currency they are pegged to. In case of BNDES, the Stablecoin will be pegged to the Brazilian Real (R$).
Stablecoin will run on Ethereum Blockchain
Pegging the new Stablecoin to the Brazilian Real will not only secure the new token but also open up opportunities for the Brazilian fiat currency through connections to the virtual world. And the Stablecoin will use the Ethereum Blockchain.
The launch is scheduled for January 2019 and the bank has already taken first test runs throughout 2018. One type of usage will be the allocation of funds to cultural institutions, which can be deducted from tax. Development company ConsenSys will be advising BNDES during the launch, as well as the Ethereum Foundation.
The move is understandable since Blockchain technology offers opportunities to fight corruption and create more transparency. There have been several problems with these issues within BNDES during the last years. Thus one goal is to regain confidence in state-owned banks among citizens and businesses.
Brazil is the second Latin American country to create its own Stablecoin
Brazil is only the second country in Latin America to have its own cryptocurrency. Venezuela’s Petro was the first state-owned cryptocurrency, and was launched just recently. BNDES has not yet disclosed the name of the Stablecoin but assured that one unit of the coin will be worth 1 Brazilian real. If successful, the project might be expanded to non-cultural areas within BNDES. Gladstone Moises Arantes Jr., technical lead of the BNDES blockchain initiative, said:
“The concept we have could be used for other institutions in Brazil or the government as a whole.”
The Stablecoin can only operate taxes of cultural institutions. Therefore, only a small portion of the business will get in touch with it.
Companies can invest in culture with the BNDES Stablecoin
According to Vanessa Almeida, Systems Development Manager at BNDES, the system will make government investments faster and safer. She explained how the system will work:
“We have a kind of ID in Brazil that has a certificate to send a token to the company, the company has to sign with this certificate…we will know in advance to which address you can send the tokens.”
“We can enforce rules using smart contracts. The company that receives the money can only spend it with companies that are working within the sector.
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