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A Brazilian bank is about to issue a stablecoin that says it will maintain parity with the real, the national currency of Brazil.
Reports show that Brazil's National Social Development Bank is ready for a January 2019 pilot test for the BNDES token after conducting experiments in 2018.
According to the bank, the cryptocurrency will be issued on the Ethereum blockchain and the bank states that the BNDES stablecoin is supported 1: 1 by the country's national fiat currency. The new token will be used to make tax deductible contributions to cultural institutions.
During the pilot phase, the financial institution will release BNDES worth several hundred dollars to the country's National Film Agency, which will use the funds to promote the film industry in Brazil.
The state bank has seen a good part of the corruption allegations involving corruption among other scandals.
However, the creators of tokens are optimistic that the use of the public blockchain for the BNDES token will significantly increase public trust in the bank and other state institutions plagued by similar scandals.
It is expected that the test phase will involve the use of the electronic identification certificates of Brazil issued by the National Taxpayers Registry (CNPJ).
The identification is already widely used as an official registration document in the country and, according to Vanessa Almeida, responsible for the development of the bank's systems, the token will ensure that the money sent to the companies is spent in the right way.
He added that token issuers will be able to reach it through smart contracts and have noticed that the CNPJ register allows them to "know in advance to which address it is possible to send tokens".
The initiative benefited from the efforts of Alex De Sande, a developer of the Ethereum Foundation. It aims to help Brazilian filmmakers collect and share financial documents instantly.
The beneficiaries of the pilot program will redeem the BNDES tokens through the bank in exchange for fiat local currency.
The pilot program will include contributions from ConsenSys, the Ethereum development study. The news that ConsenSys is working with the token team is not surprising given that founder Joe Lubin wrote about restructuring the company.
Anticipating ConsenSys 2.0, Lubin said the New York-based company would venture into blockchain advice, particularly on the design of cryptocurrencies.
Stablecoins have become popular with cryptocurrency merchants who have found them useful when a trader wants to access other cryptocurrencies without having to deal directly with a bank.
These stable currencies have recently increased in terms of use, with several exchanges, including Coinbase, Binance, Gemini and OKEx all moving quickly to list peg-rate cryptocurrencies.
However, unlike these exchanges, the BNDES token, as issued by the Brazilian bank, uses the use of a crude-rate cryptocurrency beyond mere market speculation. The token could therefore be used in a wide range of initiatives, including those related to education and infrastructure.
To this end, the bank plans to re-evaluate the program once the results of the pilot are out, with the aim of extending the use to other organizations that manage public money.
And according to Gladstone Moises Arantes, a member of the BNDES blockchain technical team, the stablecoin could end up being used by many other institutions or even by the government itself.
Meanwhile, the cryptography market continued its mini-rally which saw the Bitcoin (BTC) gain over 8% of the day to reach $ 3,900 compared to the US dollar.
According to XBT.net, overcoins also increased, with Bitcoin Cash (BCH) among the biggest gainers in the top ten with 37% trading at $ 123.
disavowal: This is not an investment advice. Cryptocurrencies are highly volatile assets and are very risky investments. Do your research and consult an investment professional before investing. Never invest more than you can afford to lose. Never borrow money to invest in cryptocurrencies.
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