Brazil’s Real-pegged stablecoin BRL1 set to launch later this year

Brazil’s largest crypto exchange platforms Mercado Bitcoin, Foxbit and Bitso have teamed up to launch BRL1, the first stablecoin pegged to the Brazilian Real.

On October 8, Mercado Bitcoin, Foxbit and Bitso will launch a stablecoin pegged to the Brazilian Real and called BRL1, according to Brazilian media outlet Valor. The Brazilian stablecoin, which will be launched later this year, will be published on Ethereum and Polygon.

Digital bank Cainvest said the stablecoin is preparing to provide liquidity to Bitcoin(BTC) and Ethereum(ETH) trading pairs listed on these exchanges and other markets to be developed in the future.

The Brazilian stablecoin is designed to accommodate transactions between local exchanges and facilitate cryptocurrency purchases and sales without using fiat-based rails.

Fabricio Tota, business director of Mercado Bitcoin, said that the goal behind creating BRL1 was to bridge the gap between traditional banking institutions and the crypto industry. He hopes BRL1 can address the “friction between the traditional financial system and the crypto world.”

“And when you launch a real cryptocurrency with the support of the big players in this market, I think we’ve gone a few steps forward, we have a good chance of reaching that casual user,” Tota told Valor. he said.

As announced by the three crypto exchanges, the value of BRL1 will be pegged to the Brazilian Real, meaning 1 BRL1 token will equal 1 R$. The reserves will be backed and created by the country’s National Treasury bonds.

Cainvest President Charles Aboulafia emphasizes that token reserves will be audited and disclosed to users with full transparency.

The new crypto asset will be available on exchanges later this year with an initial supply equal to R$10 million, held by MBPay and Nvio, Bitso’s payment entities, and supervised by the Central Bank of Brazil.

Crypto exchange representatives expect the stablecoin to reach a total transaction volume of BRL100 million issued in a year.