If traditional institutions, such as banks and cooperatives or credit unions, adopt blockchain, this technology can be viewed with less distrust. And the advancement of this technology does not decree the end of banks, said The CEO of Transfero, Thiago Cesar, in a lecture at WCM 2020 — a cooperative event.
“I believe that changes are always gradual. Many people are radical and say that cryptocurrencies will kill banks, the traditional model. But I don’t see it that way. I think there’s going to be an adaptation and that banks and credit unions are going to absorb some of that technology, and things are going to continue to exist as they always have, but done in maybe different ways”.
So if he had a credit union today, Cesar says he would seek to develop a smart contract. “I would put my IT team to create a smart contract on the Ethereum network, for example. And so it would start raising international funds, getting people who have bitcoin, digital dollars, to deposit their assets at the cooperative’s contract”.
Smart contracts use blockchain and can be an extra source of capital for cooperatives
He also suggested associating the cooperative’s name to the contract, attracting those who trust that cooperative. “People who have digital assets will be able to deposit and receive compensation compatible with the digital asset market. Besides being an additional capital to use in the end activity of the institution.”
Questioned about a way for people to feel more comfortable using blockchain, the executive suggested greater participation of large institutions, with whom citizens are most familiar.
“The most natural and easiest way is for traditional institutions to embark and dive into this world and start creating products based on this technology”, he said. He recalled the creator of one of the largest smart contracts, which has raised more than US$ 20 billion. He did not belong to the financial world. “He was an Eastern European programmer”, he explains.
BRZ used traditional institutions to prove their reserves and give more security
And he added: “I think it will be very different when you start to have a stake, for example, of Icatu Seguros by giving an endorsement to a smart contract. Or think of mechanisms through traditional means to bring more weight to these technologies”.
Thus, he cites as an example the BRZ, the stablecoin of Transfero, whose units are equivalent to R$ 1, and which are backed in the Brazilian currency. To give more transparency and security to the market, the company hired law firms and accounting to audit the reserves of the digital asset.
“The technology has proven its worth. What is missing is heavier players entering this market and using these technologies, because as a result, you would join the two worlds”, he concluded.