Blockchain investment firm QR Capital’s Ether exchange-traded fund (ETF) has been approved by Brazil’s Securities and Exchange Commission (CVM).
This first Ether ETF approval of the country comes just three weeks after their first Bitcoin ETF went public on the Brazilian Stock Exchange, which was approved in March.
QETH11 “will be listed on the B3, which becomes the 1st exchange in Latin America to have a 100% Ethereum ETF,” announced the firm on Twitter on Wednesday. The date of listing hasn’t been set yet.
This week, another manager Hashdex announced its Bitcoin ETF BITH11, which bets on neutralizing the carbon footprint of mining bitcoin acquired by the fund. It will be listed on the Brazilian stock exchange in the first half of August.
Brazil has also approved an ETF, HASH11, that invests in a basket of cryptocurrencies.
Meanwhile, QR Capital’s Ether ETF will track the same Ethereum index used by the CME Group, the CME CF Ether Reference Rate. QR Asset Management said.
“The Brazilian investor now has the possibility of exposure to the two largest and most valuable digital assets in the world, in a regulated, simple and secure manner. It is no longer necessary to register in exchanges, create private keys or worry about secure custody.”
QR Capital will use crypto exchange Gemini’s crypto custody solution to store digital assets.
AnTy has been involved in the crypto space full-time for over two years now. Before her blockchain beginnings, she worked with the NGO, Doctor Without Borders as a fundraiser and since then exploring, reading, and creating for different industry segments.
Brazil’s Economy Minister recently spoke during the celebration of the Caixa Economica Federal’s 100 millionth digital savings account, and he used the opportunity to announce Brazil’s own CBDC.
The Central Bank Digital Currency (CBDC) trend is larger than ever, with countries worldwide announcing their intention to create their own digital currency, one after another. The latest in this long line is Brazil, whose Economy Minister personally confirmed plans to launch digital real.
Brazil announces its upcoming CBDC — digital real.
Brazil’s decision to launch its own digital currency does not come as a major surprise. After all, as soon as China announced digital yuan, many countries started developing their own CBDCs in China’s fear of obtaining too much influence.
As soon as a few nations’ central banks showed their willingness to start creating their own crypto, the rest were bound to follow. Brazil comes as the next one in line, as confirmed by its Economy Minister, Paulo Guedes.
Guedes made his statement yesterday, November 5th, during a special ceremony that celebrated the opening of the 100 millionth digital savings account in Caixa Economica Federal.
He said that the central bank is once again autonomous and that the digital dimension is booming. With that being the case, he revealed that Brazil would have its own digital currency and remain ahead of many other countries.
Brazil was prepared for work on CBDC, but it did not address it before
Interestingly, this was the first time that the country’s Economy Minister addressed this subject. However, he still did not reveal any more details regarding the upcoming digital real.
Of course, Brazil has been keeping an eye on crypto in the past. Its central bank even announced setting up a study group for potential CBDC issuance back in August.
Its president, Roberto Campos Neto, also said that Brazil requires improvement in its currency. However, he expected that this would happen within the scope of a new federal digital payment system, Pix. He said,
“In our case, Pix is very important because from now on, we see the union of an instant, open and interoperable form of payment with an open data system. They will meet somewhere in the future with a currency that has yet to be perfected.”
Brazil’s CBDC to arrive in 2022
As mentioned, there are currently no available details on the digital real, as not even the central bank has released new information about it. However, Campos Neto did reveal that digital real will be in circulation in 2022.
Another interesting thing regarding this announcement is its timing. As some may know, Pix just recorded its first transaction this Monday, and it will be officially available as of November 15th.
According to the central bank’s statement, it will only be used for foreign exchange transactions in and out of the country as for digital real.
Brazil’s central bank president, Roberto Campos Neto, announced the country’s plan to launch its own central bank digital currency (CBDC) by the end of 2022.
Speaking at a Bloomberg-sponsored event, Roberto Campos Neto, president of the Banco Central, praised digital currency payment systems as the future of financial systems claiming the country is in the pipeline of launching their CBDC in the coming two years.
Despite starting their research on its digital payments systems and CBDC recently, Brazil aims to accelerate its efforts in the field to provide a stable and working platform by 2023. According to Neto, Brazil’s CBDC will be built on an instant payment system allowing efficient, open, and interoperable transactions across similar systems in a bid to improve the financial system.
Neto stated Brazil is ready to launch its CBDC given it has “all the ingredients” to start its CBDC project and complete it by 2022. He said,
“To have a digital currency, you need an instant payment system that is efficient and interoperable; an open system, where you can create competition; and a currency that has credibility, is convertible and international. After that, I think you have all the ingredients to have digital currency. We think we will have it in 2022.”
Additionally, the central bank has been working on its banking infrastructure in a bit to provide instantaneous banking settlements between peer banks. The new infrastructure, PIX, will be launched in November, allowing peer-to-peer open banking transactions that can be settled in a matter of seconds.
Neto, however, did not mention the role that the CBDC will play in its new PIX infrastructure. It is expected to be complementary to the latter. He further clarified the role of a CBDC as:
“A CBDC distinguishes itself from cryptocurrencies without national trust, like Bitcoin, because it is just a new form of representation of the currency already issued by the national monetary authority, that is, it is part of the monetary policy of the issuing country.”
With the launch of its own CBDC project, Brazil joins several countries already working on CBDC’s, including China, Japan, and Canada.
Ripple Inc.’s, Brad Garlinghouse held a ‘closed to the press’ meeting with Brazil’s Central Bank officials on May 30th to discuss “institutional matters” in the South American country. Top officials from both Ripple and the Central Bank of Brazil held the meeting at 1700 hrs to 1800 hrs. What could be the motive behind the closed-door meeting?
Ripple Executives meet with the Central Bank of Brazil Officials
According to the Agenda of Authorities of Banco Central do Brasil website, the schedule of Roberto Campos Neto, the central bank’s president, showed he met online with Ripple executives on Saturday evening last week. While major details on the meeting remain unrevealed to the media, the agenda only hinted at “institutional matters”.
Three Ripple executives and board members accompanied CEO at Ripple Inc., Garlinghouse – Ben Lawsky, Member of the Board of Directors of Ripple, Eric van Miltemburg, Senior Vice President, Global Operations, Ripple, Luiz Antonio Sacco, Vice President of Global Operations and General Director for Latin America at Ripple.
Brazil’s central bank was led by Roberto joined by João Manoel Pinho de Mello, the Financial System Organization and Resolution Director, and Otavio Ribeiro Damaso, Regulation Director.
Both, Ripple and the Central bank of Brazil officials have remained silent on the conference discussions. Could the bank be looking at a possible central bank digital currency (CBDC) or settlement platform?
Brazil’s QR based instantaneous payment system
The most sensible explanation for the meeting may be to discuss the QR-based payment system that the central bank is developing. PIX, the non-crypto payment platform will offer P2P ad B2B payment solutions within the country aiming to reduce the transaction costs and speed of transactions.
Brazil’s financial watchdogs will start using a shared blockchain platform dubbed ‘PIER’ to enhance the transfer of information amongst the institutions. This initiative was launched in April with the major stakeholders being Banco Central do Brasil (BCB), insurance regulator (SUSEP) and the securities authority, CVM. Notably, the country’s social security oversight body (PREVIC) is also set to join this ecosystem eventually.
This blockchain network was initially developed by Brazil’s central bank, BCB, which credited the new tech for its horizontal layout in information sharing. The bank had begun experimenting on blockchain projects as early as 2017 and revealed its ongoing work on PIER network a year later.
BCB’s press officer, Ivone Portes, has since told media outlet Coindesk that the project cost R$1,300,000 which translates to $252,700 as per the current exchange rates. She went on to note that the bank is, however, confident in getting value from PIER blockchain.
The Value Proposition
PIER is run on JP Morgan’s open-source network, Quorum; this Ethereum based innovation has been hailed by the BCB for its ‘private IT infrastructure’. BNamericas further highlighted that the platform leverages cloud computing services from Microsoft Azure. Marcelo Barbosa, the president of CVM, said that PIER will change Brazil’s markets scene towards a more profitable outlook,
“Our objective is that this system promotes gains to the market, given the more efficient, safe and adequate supervision and enforcement to the new technological scenario that we are experiencing”
With PIER’s online bridge, the BCB is also optimistic about streamlining its oversight on Brazil’s financial institutions. One of the functions that have been mentioned by this central bank is vetting elected officials of its regulated entities. The bank’s deputy head, Daniel Bichuette, added that PIER would effectively reduce the processing time of assessing requirements.
This development will probably push Brazil’s blockchain space to newer practicalities. Currently, the South American country is among those that have embraced blockchain tech on a larger scale across the world.
As a result, some private banks within its jurisdiction have already pioneered digital currency tokens on Tezos blockchain. The BCB together with its peer regulators also formed a blockchain sandbox back in June 2019 as a means to spur growth within this industry.
Brazil’s Central Bank is set to launch a new payment system which it claims will offer near instant fund transfers. The new payment system is set to be released in November, Cointelegraph reports.
The new system will be referred to as PIX, a short form for Brazil’s Instant Payment Scheme. The platform will allow for peer-to-peer as well as business-to-business (B2B) transfers within 10 seconds through mobile phones, selected ATMs and internet banking.
In a press statement released on Feb. 20, all payment and financial institutions that are regulated by Brazil’s Central Bank are mandated to give out the requisite functionalities to their active clients for smooth facilitation of the PIX transfers. The press statement also indicates that QR Codes will be used for execution of transactions. Users can also use identification details like taxpayer identification number, phone number or email.
An Answer To Cryptos
Cointelegraph reports that the head of the central bank Roberto Campos explained that the new platform is set to directly compete with payment systems that are based on distributed ledger. He stated that the idea behind the creation of PIX was necessitated by the desire to have a payment platform that is secure, transparent, cheap and fast. He added that the new system is set to have characteristics as those of Bitcoin and other cryptos.
Campos also stated that the PIX platform will be the central bank’s top priority this year. He went ahead to state that the platform will be instrumental in eliminating the need for individuals to always have physical currencies which leads to a high cost for the society.
The statement also states that the central bank and Brazil’s Treasury Secretariat have already inked a deal which will allow Brazilians to remit their federal taxes through PIX starting from November this year. In addition, the Brazilian government is set to provide various payments like income tax refunds, grants, social benefits via PIX in the near future. The aim is to enhance mass adoption of the platform.