The BNDES (Brazilian National Social Development Bank) announced that it will conduct a pilot test beginning January 2019 to assess the feasibility of using a proprietary stablecoin in an effort to combat the growing wave of corruption that plagues Brazil and ensure transparent and fast transactions.
The BNDES Token is a stablecoin created as an ERC20 token on the Ethereum network. It maintains a 1:1 parity with trust money handled exclusively by the bank and was created this year as a joint initiative between BNDES, the Brazilian Ministry of Development, Industry and Foreign Trade and ConsenSys as the company in charge of providing technical advice.
The idea behind the creation of the token is to use it for tax-deductible contributions to cultural and non-profit organizations while reducing the time and costs associated with traditional banking transactions.
Initially, the bank will issue a small amount of several hundred dollars to be transferred to the Brazilian National Film Agency (ANCINE) for the promotion of audiovisual projects.
Ancine is a government agency created in September 2001 with administrative and financial independence under the responsibility of the Brazilian Ministry of Culture.
In an exclusive granted to Coindesk, the team behind the initiative claims that the characteristics of the Ethereum blockchain make it possible to be sure that the funds cannot be diverted. In this regard, Vanessa Almeida, BNDES systems development manager said
“We can enforce rules using smart contracts. The company that receives the money can only spend it with companies that are working within the [film] sector …
We have a kind of ID in Brazil that has a certificate to send a token to the company, the company has to sign with this certificate…we will know in advance to which address you can send the tokens.”
So far no details are known about the pilot test; however, the initiative has generated positive reactions. Rosine Kadamani, founder of the educational Blockchain Academy in Brazil commented on the effects this stablecoin could have if it was successful:
“Brazil is very well-known for corruption; there’s a lot of questioning about the use of public funds … They start with a stablecoin that is basically an accounting control because everything goes back to the bank. But in the future, if it works well, there are other implications … The concept we have could be used for other institutions in Brazil or the government as a whole.”