According to the Central Bank’s project, the Brazilian market should undergo a revolution in the next four or five years, aggregating various assets in a single-user wallet. The reasoning was exposed by Transfero’s CFO, Carlos Russo, during a panel on stablecoins at the Blockchain Rio Festival on September 2, an event that brought together several players in the crypto sector.
The possible resolution of the agency should lead to the popularization of stablecoins, favoring Transfero’s BRZ.
The idea is to create an aggregating wallet, combining bank accounts, applications, cards, investments in general, and crypto assets. In the future, it will be possible to pay for a cup of coffee with stablecoins, for example, using a cell phone application or any other instrument that may emerge. It will even be an important instrument for accessing credit.
“There are two main developments. One is this integration of the Brazilian payment system with the world of blockchains. Everything will be connected in one place. The Central Bank has an active role in this, in a pioneering way. The second aspect is the internationalization of this wallet, of this money. As far as you have cryptos in the wallet, you are already international. If you are in the US, you will be able to use that wallet”, explained the CFO.
Cash Management
The application will act intelligently, doing the so-called cash management, which means, it will tell you where to withdraw money from when you need to pay for something.
“You will open your wallet and see the balances of your bank accounts, your cards, and at the end a sum of what you have. Then, the app will automatically tell you where you have the most balance. And it will tell you where the money will be withdrawn from, in banks or in crypto, based on what is best for each individual”, he exemplifies.
Technology
Carlos Russo explained that the integration infrastructure between the formal system and blockchains is based on API communication technology through Open Finance. Banks will be required to provide the data for this application.
“Transfero supports the creation of this communication infrastructure between this traditional world and the crypto world, which is very positive. It’s going to be a big leap in the crypto world”, the executive argued.
The move will help popularize BRZ, the world’s leading stablecoin not pegged to the dollar. Since 2019, when it was created, it has been issued US$ 2 billion in BRZs, considering US$1.2 billion in 2021 and US$ 400 million to US$500 million this year. BRZ is among the top ten most traded crypto assets in Brazil.
“With a new wallet from the Central Bank, every Brazilian will have straightforward access to the BRZ”, explained Carlos Russo.
The BRZ, in practice, internationalized the Real; it is the international Real because people no longer need to buy dollars or euros to travel. Stablecoins are considered a safe investment because they are less volatile than other crypto assets, especially those pegged to foreign currencies.
The CFO also explained to the panel audience three types of stablecoins. The centralized ones, backed by bank accounts or other reserves, are the dominant group, with issuances of US$ 200 billion; the crypto assets-backed, with products backed by Ethereum, for example; and algorithmic stablecoins, which offer higher risk.
Expansion
To get an idea of the international stablecoin scenario, considering the US$ 200 billion already issued, stablecoins still have much to expand compared to the traditional market. In the US, there are US$18 trillion in bank deposits.
“Stablecoins are still a very small fraction of the market, it has a lot to expand, but it is the next step when you talk about the evolution of payment means”, the CFO pointed out.
