State Bank of Brazil and Central Bank of Egypt develop national stablecoins

Turkey’s Lira Plunges After Central Bank Upheaval

State Bank of Brazil and Central Bank of Egypt develop national stablecoins

Brazil’s State Bank has announced the release of an Ethereum-based stablecoin pegged to the local currency in the near future to fight corruption, while the Central Bank of Egypt is actively exploring the prospects of launching a digital version of the local pound in an effort to get rid of cash..

The National Bank for Social and Economic Development of Brazil (BNDES) announced that in January 2019, a pilot project of an Ethereum-based token will be launched, which will be backed by real in a 1: 1 ratio. Testing of the virtual currency was successful, so it will begin to be used for tax-free subsidies to cultural institutions. One of these will be the National Film Agency, which will use the funds to pay for new scripts and promote films.

Previously, BNDES was embroiled in corruption proceedings, so it decided to use blockchain and stablecoin to combat misuse of funds and bribes, and in parallel plans to increase the level of trust from citizens..  The developers say that thanks to smart contracts, they can limit in advance what money can be spent on and to whom it can be transferred. An identification certificate is required to confirm the transaction, so the bank can easily track the movement of funds.

Yesterday Ayman Hussein, deputy governor of the Central Bank of Egypt, also announced that the prospects for launching a digital version of the local pound are currently being studied. With the help of the national cryptocurrency, the agency plans to significantly reduce the cost of issuing and transferring funds, compared to fiat. Simultaneously stimulating the transition to a cashless society.

According to Ayman Hussein, a number of international organizations are participating in the development, but he did not specify which ones and did not name those involved. It is also not yet known whether the Egyptian stablecoin will be available to citizens or will become an exclusively interbank instrument..

Until now, stable cryptocurrencies have been used mainly to quickly convert assets on exchanges without the participation of banks. However, launching pilot national projects outside speculative markets can change not only attitudes towards stablecoins, but also towards ways to combat corruption, as well as control over the distribution of public funds..

Recall that Facebook has begun to speed up the development of its own cryptocurrency.

text: Ivan Malichenko, photo: coiniran