The Brazilian National Social Development Bank, a state-run bank, will be launching a pilot program of the BNDES token in January 2019. The BNDES will be a stablecoin pegged 1:1 with the Brazilian Real (BRL). For reference, each BRL is worth USD 0.26 and has declined from USD 0.32 since January 2018.
Stablecoins are becoming an increasingly popular breed of cryptocurrencies, with their total market cap between USD 2-3 billion. This will be the first BRL stablecoin and one of the first issued by a government bank.
Apparently, the Brazillian National Social Development Bank has been experimenting with this throughout 2018 and the pilot program will begin by giving tax-deductible contributions to cultural institutions, who will then presumably try to use the tokens. Several hundred BRL of BNDES tokens will first be issued to the National Film Agency.
The BNDES token will use electronic identification certificates from the National Registry of Taxpayers, which are widely used in Brazil as official documents. The Brazilian National Social Development Bank will enforce rules on BNDES use via smart contracts, such as prohibiting the National Film Agency from using the tokens outside of the film industry.
At this point, the mechanism which will maintain the BNDES with parity at the BRL has not been disclosed. Historically, stablecoins have struggled to maintain parity with their respective fiats. Even the most popular and widely used stablecoin, Tether (USDT), struggles to achieve this. In October and November 2018 USDT fell well below parity and since returning to near-parity, it continues to be volatile.
USDT’s volatility has mostly been due to a lack of a dedicated bank. Presumably, the BNDES token will not have banking issues since it is being operated by a state-run bank.
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