BRZ, the first stablecoin paired with Brazilian real, will enable investors in the cryptocurrencies market to access thousands of other tokens and currencies around the world
Transfero Swiss AG released to the market the first stablecoin denominated and paired in Brazilian real: the BRZ (Brazilian Digital Token). The BRZ will allow investors in the cryptocurrencies market to access thousands of other tokens and digital currencies around the world without being exposed to the volatility of the bitcoin.
According to CoinMarketCap, there are more than two thousand cryptocurrencies and tokens throughout the world, which cannot be accessed directly by Brazilians without the initial exposure to the bitcoin, which is by nature a digital asset extremely volatile.
Using the blockchain technology of the Ethereum, BRZ, the first stablecoin paired with Real, is currently already available in four exchanges – Bittrex, SIMEX, BitForex and ZBX -, being an utility token ERC-20. About 2 million tokens have already been issued.
As it is a token, and not a security or a financial asset, the BRZ does not suffer any intervention upon its issuance or operation by the Securities and Exchange Commission (CVM). Nevertheless, the project pursued legal opinions from some of the leading law firms in Brazil and abroad with the purpose of providing security to the market.
First stablecoin paired with Real refers to tether
According to the CEO of Transfero Swiss, Thiago Cesar, the creation of the first Brazilian stablecoin has been discussed since the development and consolidation of the tether in the USA – first model of this system recognized by the market as efficient in maintaining parity between the tokens and a fiat currency.
“We are already negotiating with several exchanges and soon others will also have access to the BRZ,” he says.
The stability maintenance of the BRZ will be pursued through the disclosed reserves denominated in Reais, with transparency and professional management by the issuer – who will make the asset price curve converges on parity with the national currency. In addition, the maintenance of stability will be strengthened by the marginal arbitrage opportunities, achieved by the performance of market agents that explore price asymmetries between the platforms.
“The BRZ can be used in national and international exchanges, in operations with pairs of other assets and on OTC platforms (over-the-counter market),” highlights Cesar. According to the Executive, the new stablecoin will bring liquidity in Reais,to the altcoins’ pairs of global books. “But the traders will have a reliable stablecoin to be protected against volatility and enter the crypto markets without the initial exposure to the Bitcoin or Ethereum, usually purchased with goodwill in Brazil”, he adds.
Stablecoins win market share by maintaining the value stable
The BRZ was created by the Department of Asset Tokenization of Transfero Swiss AG, the largest digital asset manager of Latin America, founded in 2015, with headquarters in Switzerland and operations in Europe and in Brazil.
The concept of stablecoin – cryptocurrency which seeks to keep its value over time in relation to a fiat currency or group of assets – is on the rise right now with the launch of the Libra, the currency of Facebook, which is backed by a basket of assets in various currencies.
Similarly to the Libra, the BRZ uses a unique mechanism of collateralization, where all the BRZ in circulation have a counterpart in Reais or in financial instruments denominated in national currency. The main stablecoins in operation pegged to dollar -TrueUSD, Tether and PAX – use this mechanism to control the price, in a model that has nearly five years of operation.
The first stablecoin paired with the Brazilian real will be an speculative asset?
As the stablecoins keep stabled over time, they do not present profitability. That is to say, the goal of BRZ is not speculation, but rather increase the efficiency of transactions with digital assets and the consequent access to other cryptos, without exposing to the volatility observed on the main cryptocurrencies.
“The bitcoin ends up being a most used asset for investments and consequent movements of speculation, showing a very volatile feature. Regarding the BRZ, the sender maintains a buffer that can be audited, which demonstrates that the tokens are referenced by a coverage denominated in Reais. For such reason the market agents end up believing in the stability of the value of the BRZ” explains Carlos Russo, Head of Investments at Transfero Swiss AG.