Brazil and Argentina made a partnership with Settle Network and Stellar in order to make the process for the unbanked people of sending and receiving remittances easier. In our latest Stellar lumens news, we are reading more about the new partnership.
Settle network and Stellar created two stablecoins for the Latin American market. The ARST will be tied to the Argentine Peso while the BRLT will be tied to the Brazilian real. The Stellar-based stablecoin will make remittances between these two economies easier. In a world where the banks are making international transactions very slow and difficult, blockchain technology provides a safe and fast, and efficient alternative for sending money. however, the volatility associated with crypto makes them a little scary for many people in the world.
With this in mind, Settle Network and Stellar are now issuing two stablecons in Latin America, more specifically Brazil and Argentina. Settle Network is the biggest digital asset settlement network in Latin America for cross-border payments while Stellar is a blockchain created by Jed McCaleb who is a Ripple co-founder, in order to provide the people a decent infrastructure that is able to connect financial institutions via crypto payments. The announcement for stablecoins was made a few days ago during Stellar’s Meridian conference.
However, many wonder why you should create a stablecoin for a currency that is low in value and volatile like the Brazilian real or the Argentine peso as both lost between 20% and 30% of their value compared to the US dollar in 2019? Well, users will have a much easier way to move their funds between exchanges by having their money running on the blockchain which will save the complex procedures that are involved in making fiat to crypto transactions if they want to enter the market at all. Pablo Orlando said:
“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 a matter of seconds, opening a new world of possibilities for international remittances and cross border payments.”
The Argentinean and Brazilian economies were hit hard with the coronavirus pandemic so Settle Network is a strategic plan in the medium-term to boost the two biggest economies in South America. However, the complex bureaucracies and the social inequality in the region led to a substantial percentage of the population is unbanked or underbanked. According to research by the Brazilian FinTech company, AirFox revealed that about 44% of the total population in Brazil, doesn’t have a bank account while the CashEssentials report shows that 52% of Argentineans are unbanked.