In a world where banks make international money transfers very slowly, blockchain technology can provide a safe, fast and effective alternative to sending money. However, the volatility associated with cryptocurrencies makes them a bit scary for most.
ARST and BRLT
With this in mind, Settle Network and Stellar will broadcast two stablecoins in Latin America. ARST is tied to the Argentine peso while the BRLT is tied to the Brazilian real.
The Settle Network is Latin America’s largest digital asset settlement network for exchanges and cross-border payments. Stellar, on the other hand, is a blockchain created by Ripple co-founder Jed McCaleb. Its purpose is to provide an infrastructure capable of connecting financial institutions using crypto payments.
The creation of stablecoins was announced on November 19 at the Stellar’s Meridian conference.
But why create stablecoins for currencies as shattered as the Argentine pesos and the Brazilian real, which lost 30% and 20% of their value against the dollar, respectively, last year?
First, trade. Users with money on the blockchain could more easily transfer their funds between exchanges. This way, you can save on the complicated procedures of making fiat-to-crypto transactions if users want to try their hand at the markets.
However, the main focus of the Settle Network appears to be remittances.
“The new Settle Network and Stellar stablecoins, ARST and BRLT, allow users to virtually send Argentine Pesos (ARS) and convert them to Brazilian Reais (BRL) in seconds, opening up a new world of possibilities for international money transfers and cross-border payments.”
Pablo Orlando said.
Brazilian and Argentinian economy
Although the Brazilian and Argentine economies have been severely hit by the pandemic, the Settle Network movement is strategically important in the medium term – Brazil and Argentina are South America’s two largest economies.
However, the high bureaucracy and social inequalities prevailing in the region have led to a large proportion of the population not having a bank account. Research by the Brazilian company FinTech Airfox has shown that approximately 44% of the entire Brazilian population does not have a bank account. CashEssentials estimates that 52% of Argentines also do not have an account.