The Stablex platform already has ARST and BRLT stablecoins available for exchange. Users can trade both cryptocurrencies against ETH, BTC, and other stablecoins.
Cross-border exchange and payment network Settle Network partnered with the Stellar team to issue two new stablecoins pegged to the national fiat currencies of Argentina and Brazil.
Both companies confirm the information by saying that they are the first fiat-pegged cryptocurrencies that these countries issue. Argentina’s new stablecoin, identified as ARST, has a 1:1 relationship with the Argentine peso (ARS) while Brazil’s, called BRLT, is pegged to the value of the Brazilian real (BRL).
The main objective of these crypto-assets is to allow users from both countries to make international remittances and cross-border payments faster and easier, according to the two companies.
People already have both stablecoins at their disposal on the Stablex platform. Settle Network CEO Pablo Orlando noted that users can conduct operations with ARST and BRLT through the Stellar blockchain using the Vibrant wallet. He says that these new stablecoins will soon be listed on global exchanges.
To trade with the new altcoins, users must comply with know-your-customer (KYC) verification and anti-money laundering (AML) control. In addition to cross-border exchange between Argentine pesos and reals, it is possible to use the two pegged currencies for trading against Bitcoin (BTC), Ether (ETH), and other as yet unspecified stablecoins.
Users Question Stellar’s Plan Regarding Stablecoin Pegged to the Argentine Peso
Settle Network’s director of business development and partnerships Jack Saracco talks about the prospects for stablecoins in Latin America. He believes that a mass adoption process in the region is underway.
“Stellar partnered with us to provide closer integrations in Latin America. This association opens a huge, scalable, and compatible framework of action for local fiat currencies throughout the region,” said Saracco.
The companies chose the markets of Argentina and Brazil as they are among the largest in South America, in addition to the fact that people “use and need cross-border remittances and payments” to a greater extent. This happens even though the COVID-19 pandemic has affected their economies in recent months.
On their Twitter accounts, some Stellar followers considered it absurd to peg a cryptocurrency to a continuously devalued national fiat currency. They observe that these are currencies that constantly lose value against the US dollar.
They refer in particular to the Argentine peso. In recent months, it has lost between 30% and 45% of its value against the US dollar, trading at different prices according to the official or black market rate. For this reason, a Twitter user identified as @GonzaloLabin ironically says that “a currency linked to the Argentine peso cannot be a stable coin.”
In this regard, Orlando noted that the new stablecoins will allow users to move their funds between exchanges, fiat-to-crypto currency transactions to place their money on a blockchain and enter the cryptocurrency market. These are also aimed at the broad unbanked sectors of the population of both countries.
The executive mentions that one of the most popular cases regarding the adoption of cryptocurrencies is their use as a store of value against inflationary economies.
The opinion of Settle Network and Stellar on the Latin American case coincides with that of analysts. Many citizens in the region flee their fiat currencies in search of stores of value such as cryptocurrencies, stablecoins, or foreign fiat currencies.
Eduardo Arenas, director of Bitso Alpha, has said on many occasions that pegged cryptocurrencies help users avoid the risks of market volatility. However, he adds that they also allow them to be able to leave with a profit and directly access US dollars to protect themselves from the devaluation of local fiat currencies.
By Alexander Salazar