6 Highlights From “Stablecoins Are Killing It” #17— Featuring Emerging Market Stablecoins BiLira (Turkey) & BRZ (Brazil)
By: Lou Kerner
Tags: Cryptocurrency, Crypto, Bitcoin, Stablecoin Cryptocurrency, Blockchain

Episode #17 featured two execs emerging market stablecoins.

Our first speaker was Sinan Koc, the Co-Founder & CEO of BiLira, a Turkish Lira backed stablecoin. Previous to BiLira, Sinan worked at the ConsenSys Token Foundry in NY.

Our 2nd featured guest wa sThiago Cesar, the CEO of Transfero Swiss, the creators of BRZ, a Brazilian stablecoin. Transfero is also the largest crypto-payments processor in Brazil and a major OTC broker in Latin America.

You can watch the entire episode below:

Or you can read our six highlights below:

1. BiLira Uses Government APIs To Perform KYC On All Customers

As a fiat backed stablecoin, BiLira asks first time users for their name, date of birth, and their Turkish ID that they verify via government APIs. Users that pass are then given Level 1 access, which lets them access a limited number of BiLira tokens. If users want more tokens, for trading or other purposes, they need to pass through Level 2 KYC, which also includes AML. To date about 2,500 customers have passed through KYC Level 1, and about 1,000 of those, have also passed through Level 2 KYC.

The native BiLira stablecoin (TRYB) is pegged to the Turkish Lira, and is live on all major Turkish exchanges, as well as other centralized exchanges outside of Turkey like FTX, and decentralized exchanges like Uniswap, Kyber, and Balancer. As BiLira is non -custodial today, users need their own wallet (e.g. Metamask, Portis, Argent ..) or an account at an exchange that supports BiLira.

To verify the 1–1 backing, BiLira is audited quarterly. BiLira also has a multisig structure, so they can’t issue BiLira tokens without confirmations from all three BiLira founders. Sinan stated that once regulations are passed, BiLira would be happy to give one of the keys to the Turkish Central Bank.

2. Avalanche Will Be The 2nd Layer 1 Protocol that BiLira Goes Live On (Ethereum Was The 1st)

Sinan stated that Ethereum has a great network effect, but the gas costs and speed of the network have been lagging. As Sinan had worked with Turkish Cornell Professor, and Avalanche Founder, Emin Gün Sirer, it was natural for BiLira to look at Avalanche. Sinan was impressed with Avalanche, so that will be the second blockchain they launch on.

BiLira is blockchain agnostic, and will look at where the users and use cases are going when deciding what new blockchains to launch on in the future.

3. The Primary Use Case For BiLira Is As A Fiat Onramp/Offramp, But Other Use Cases Are Emerging

BiLira works with local exchanges as an onramp/offramp. BiLira also works with FTX to allow Turkish users to send a domestic bank transfer and then see the BiLira tokens in their FTX account. Then, via the BiLira/Tether pair, with liquidity provided by BiLira and other market makers, users can buy Tether without slippage, and then they can access all the other Tether trading pairs on FTX. BiLira is thus the cheapest way to buy Tether or Bitcoin from Turkey with Turkish Lira.

Remittances are an area of growth. Previously, Turkish remittances needed to first go to USD before going to any other foreign currency. With stablecoins, BiLira can now trade directly with other currencies, like BRZ.

BiLira is also a big believer in DeFi, and is has integrated with Balancer and others to allow BiLira customers to access those platforms.

4. Brazil’s Lack Of Integration With The International Financial Community Is Unique Among Major Economies

The Brazilian real is a non-deliverable forward, which means you can’t trade the real in foreign banks or settle internationally in the real. So while Brazil os the worlds 9th largest economy, it’s not integrated with the international financial community.

In addition, Brazil has significant capital controls, and Brazilian banks are reluctant to work with small or mid-sized customers. As a result of all those constraints, since 2016 onward, Brazilian import/export companies have increasingly used bitcoin as an easy and cheap way to facilitate cross border payments. As a result, the price of bitcoin in Brazil got a little of of control relative to the Real, trading at a 10%-15% premium in Brazil by 2018/19.

5. Transfero Started In Brazil In 2015 As A Fiat Gateway & Credit Card Acquirer Before Launching BRZ In 2019

Given bitcoin’s price premium in Brazil, and the long settlement times (1–5 hours), bitcoin was no longer solving the issues it was originally used for in Brazil. So it made sense to launch a Brazilian stablecoin that could be an international payment system.

BRZ is over-collateralized, with reserves in cash, crypto, and foreign currency. Every time someone buys BRZ, they are exchanging it for other hard assets (e.g. dollars, euros, …) 5–10 minutes later. So they’re constantly minting and redeeming.

6. BRZ’s Main Advantage Is It’s Stability Relative To Bitcoin

Now, people no longer have to rely on bitcoin, which is highly volatile.

BRZ is 1–1 backed, in reserves they hold themselves, with audits starting in October. BRZ is an ERC-20 token that’s globally accepted on exchanges like FTX. Market makers can trade dollars for BRZ, and then BRZ settles with them. It’s a true more international payment platform as most clients are also using their gateway solution.

For example, gaming companies work with BRZ, which provides them a fiat bank account where they can let their users deposit Lira in to a bank account, and then credit those users with BRZ, that the gaming companies can then redeem for dollars.

So companies can do business in Brazil without establishing a company in Brazil. BRZ is also the Brazilian onramp for FTX. Binance tried doing it themselves, and ended up getting fined because they didn’t do things right

There was lots of other great stuff in the show if you have the time.

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