Blockchain and cryptocurrency came to develop and make international transactions much faster than they used to be, in addition to saving and reducing transfer fees.

However, encrypted digital currencies and their volatility have become frightening many users, which led to the emergence of stable digital currencies that are also based on the blockchain, but with less volatility.

Recently, two stablecoins were announced in Latin America, these cryptocurrencies are built on the Stellar blockchain.

These stablecoins are the “ARST” coin whose value is based on 1 Argentine Peso, and the digital stablecoin “BRLT” whose value is based on 1 Brazilian Real.

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The “Settle” network is the largest digital asset settlement network in Latin America destined for use in exchange and cross-border payments platforms and is the custodian of these digital stablecoins.

Whereas, “Stellar” is a blockchain created by Mr. “Jad McCaleb” who is the same co-founder of Ripple.

Stellar aims to provide an infrastructure capable of connecting financial institutions via cryptocurrency payments.

The stablecoins were announced on November 19 during a conference “stellar longitude”.

But why create stablecoins whose value is based on affected currencies such as the Argentine peso and the Brazilian real, which respectively lost 30% and 20% of their value compared to the dollar last year?

Answer:

These digital stablecoins were created for one thing and that is to facilitate trading.

Users can now have an easier way to transfer their funds between trading platforms as well as facilitate the process of keeping funds on the blockchain.

The creation of stable digital currencies based on the blockchain reduces the redundant procedures when wanting to trade fiat currencies for cryptocurrencies.

These digital currencies also facilitate international transfers and settlements, according to Pablo Orlando, a spokesperson for Settle:

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The new Settle Network, ARST and BRLT stablecoins built on the Stellar blockchain, allow users to send Argentine Peso (ARS) and convert it to Brazilian Real (BRL) within seconds, opening up a new world of possibilities for international transfers.

Although the Argentine and Brazilian economies have been severely affected by the Corona virus pandemic, the move of the Stellar network is a strategic move in the medium term given that Brazil and Argentina are the two largest economies in South America.

Large bureaucracies in both Brazil and Argentina have led to the social inequality prevalent in the region and this has also led to a large percentage of the population being unbanked or under-banked.

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Research conducted by the Brazilian financial technology company Airfox revealed that about 44% of the total Brazilian population does not have a bank account.

While CashEssentials estimates that 52% of Argentines do not have a bank account.

Therefore, the announced new digital stablecoins can provide people and help them send money with one click, and their use can flourish even more in the future.

Read also:

The National Bank of Ukraine adopts the “Stellar” protocol to launch its official currency in digital form

Samsung phones support financial payments based on the Stellar Blockchain (XLM)