As a seasoned researcher with a keen interest in the intersection of finance and technology, I find this development particularly intriguing. Brazil’s move towards creating a stablecoin pegged to the Brazilian Real, BRL1, is a significant step forward in the adoption of cryptocurrencies within traditional banking systems.
The leading cryptocurrency trading platforms in Brazil – Mercado Bitcoin, Foxbit, and Bitso – are collaborating to introduce BRL1, a new stablecoin that mirrors the value of the Brazilian Real.
As reported by Valor on October 8th, Mercado Bitcoin, Foxbit, and Bitso are planning to introduce a digital currency tied to the Brazilian Real, which they have named BRL1. This Brazil-based stablecoin is expected to be released later this year, with its issuance taking place on both Ethereum and Polygon networks.
Cainvest, a digital banking platform, announced plans to facilitate trading for Bitcoin (BTC) and Ethereum (ETH) on various exchanges by offering liquidity for their stablecoin trading pairs. This move includes preparing for the creation of additional markets that will emerge in the future.
The Brazilian digital currency is specifically created for conducting trades between local exchange platforms, making it simpler for people to buy and sell cryptocurrencies without relying on traditional banking systems.
The business director at Mercado Bitcoin, Fabricio Tota, expressed that the motivation behind developing BRL1 is to connect conventional banking systems with the cryptocurrency sector. He envisions that BRL1 will help minimize conflicts or obstacles, often referred to as “friction”, between traditional finance and the crypto world.
In response, Tota told Valor that when a genuine cryptocurrency is presented, backed by significant industry leaders, it seems we’re making some progress. We stand a decent chance of making it accessible for the average user, he added.
According to the three cryptocurrency exchanges, each BRL1 token will hold the same value as one Brazilian Real (R$). This is because the value of BRL1 is tied to the Brazilian currency. Furthermore, the reserves for this token will be backed and composed by Brazil’s National Treasury bonds.
Charles Aboulafia, head of Cainvest, underlines that they will carry out a thorough audit and openly share the token’s reserves with their users for complete transparency.
Starting later this year, a fresh digital currency is set to debut on various trading platforms. The initial amount in circulation will be equivalent to 10 million Brazilian Real, which is controlled by MBPay and Nvio, financial institutions associated with MB and Bitso respectively. This new asset falls under the regulation of the Central Bank of Brazil.
Crypto exchange experts anticipate that the stablecoin will hit a trading volume equivalent to 100 million Brazilian Reals (BRL) of the total issued coins within a period of one year.
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2024-10-09 12:54