The Ethereum network has been struggling to stay up to standard for a while now. With the rise of competing blockchains and the fall in the price of cryptocurrencies in the market, it’s been difficult for Ethereum to stay relevant. Recently, the Tron blockchain had an increase in the number of migrations and analysts believed that people from the EOS and Ethereum blockchain were migrating to Tron hence the increase.
It’s Not Over Until It’s Over
Even as the market suffers greatly, all hope is not lost yet. There are those who still believe in Ethereum as the top platform for smart contracts and decentralized applications. Recently, a state-owned Brazilian Bank announced that it is making plans to issue a stablecoin on the Ethereum blockchain. This token will be pegged to the national currency.
The Brazilian National Social Development Bank is going to launch a pilot in January 2019. The name of the token is BNDES. It will be backed one unit to one unit by the Brazilian Real and it would be hosted on the Ethereum blockchain. Throughout this year, the bank performed many experiments with the coin. Now, it will serve as a tax-deductible contribution to institutions.
Bitcoin (BTC) Price Today – BTC / USD
ConsenSys is one of the company’s that will consult with the bank during this time. While ConsenSys didn’t reveal details about the depth of its involvement, the announcement falls in line with its list of priorities last stated by Joe Lubin. Lubin said that his company is going to renew its focus to becoming a blockchain advisory that specializes in token design and architecture.
During the pilot, the bank will issue hundreds of dollars in BNDES to the Brazilian National Film Agency. This is a film distribution company that is typically referred to as EI Cine. The funds will be used to create and promote movie and script production in Brazil. Many banks in the state have had some issues with misallocation of funds and rumors of bribery in the past. With this new system, the bank will be able to reignite the public trust in all state owned banks.
The electronic identification certificate that will be used is the National Registry of Taxpayers (Cadastro Nacional da Pessoa Jurídica, or CNPJ). This is already the widely accepted document for these kinds of transactions. The development manager of the project Vanessa Almeida had this to say about the project:
“We can use smart contracts to enforce rules only companies that are working with the film sector will be able to use. We have an already existing identifier in Brazil that is licensed to send tokens to companies that will have to sign with the certificate. This way, we would know which address to send the token to.”
The project was completed with help from Alex Van, a developer at Ethereum Foundation. It will give filmmakers that are associated with EI Cine the opportunity to collect and share financial records in real-time. Recipients will redeem the stablecoins via the bank and get the local currency in return.
The data collected can be used to inform or develop future use of cases. The information can guide public policies giving the government a better map of the economy.