EN | Stablecoins, Monetary Policy and National Reserves Risk or Opportunity | MERGE São Paulo

The next session is about stable coins, monetary policy and national reserve risks or opportunities um opportunity. Please welcome Antonio Sundas, senior sales manager at crypto finance dodge bars.

Yes. All right. Perfect. Thank you very much everybody to be here. As you can see, we have a pretty interesting topic today.

I think probably one of the most relevant uh current conversation. And I would like to announce to the stage uh three uh four very important uh people that are managing this shift in the industry. Marcos Birato from Parfin, Eduardo Marquez from Bree, Stephano Cordo, Bankco Brazil and Guier Aliperti the Bankco invest Brazil is at a unique moment. All right, we have seen a huge shift in the last year. There is a lot to talk about.

The s the question is very simple. Are stable coin a risk or an opportunity? This can be seen in multiple ways. Stable coins can refer to a wide array of uh tokens and uh uh fiat currencies. We are very lucky to have here at the table some of the people that are running the greatest technological innovations to make it happen.

And uh here is of course the main one behind the BRL1. So I have few questions prepared but I'm telling you as soon as the panel is going to start they will have a very important conversation. So let's kick start and uh uh I will start with a very brief introduction. So Brazil stock makes stable coin a huge opportunity can bring tier plus zero markets they can bring uh cheaper remittances but also a risk or or or various like the celic that can weaken or the reserves that can be drained. We agreed preinarily to this panel.

There are billions that are moving out of the Brazilian ecosystem. So I will start by asking the panelists and feel free to just have an open conversation, exchange ideas uh with each other. So with Celic at 15% still corporates are interested and grabbing stable coins like USDTs. Uh what are two free fixes? could be tax breaks, could be pixel links that make BRL stables the easy choice without slowing things down for the market.

Please, whoever thinks can start. Oh, I I can start. Um, yeah, I think uh Brazil has been using uh dollar nominated stable coins for for many years now. uh is one of the the countries that uses a lot for uh remittances coral border uh and I think now with the uh clear regulation financial institutions will start providing this as well because it was more OTC players exchange and now I think uh banks financial institutions will will provide this uh when it comes to the the BRL stable coins and we have some um we have the the one from the the the exchanges are the BRL1 uh then BRL uh lay so there are a few uh showing up BRZ was the first one by transferro that was used in in FDX right so all the BRL stable coins started by by the exchange etc but now we probably will be seeing um BRL stable coins issued by financial institutions I know Eduardo is here from B3 and they just announced three weeks ago they're launching their stable coin so I think the combination of the BRL stable coin and the US US stable coins will be uh very important for the development of the tokenized market and I think this is is the next phase that we're going to see uh coming.

Yeah. and and and to complement here on on Viato what he's saying is uh I think we have a lot of great projects uh uh national projects in development are already deployed and uh we're a critical moment now with vast regulation already out and stable coin regulation uh to be released and I think it's very important that we we are very the BCB has a really good challenge here to make a regulation that is uh complies with all the standards and and and has uh uh the confidence for the institutions to join join this market but at the same time uh doesn't restrict and and makes it possible for Brazilian uh stable coins, Brazilian national companies to thrive in this market. I think we have uh a huge uh uh potential here in Brazil for our ecosystem and it would be very good to see uh uh uh regulations with in incentives for national companies for uh BRL stable coins because at the end of the day uh one of the biggest uh financers of uh US national depth for example is uh the USD stable coins. So u it's it's good to make a parallel that the BRL stable coins could be a significant uh finance year for the Brazilian national debt which of course it benefits the government uh uh national policy and keeps uh a lot of the flows uh inside Brazil. So I think it's the regulator has a huge challenge.

I don't think it's a it's an easy thing to do. I think uh with the technologies and what we're seeing in blockchain, it changes everything uh in terms of the usual framework of the traditional markets but uh I I trust that they will uh do a process speaking with the market as they they have done in the vast regulation and we will be able to uh deploy and have something that ultimately will benefit all Brazilians and the whole of the ecosystem.

Yeah. Um I think this uh the the the the main value uh the most valuable thing in financial system is trust. So now we are starting to to develop our own framework in in crypto and and and uh blockchain area for for finance trading. And uh our our clients expect the same rigor and the same uh uh trust and and and and confidence that uh our business in in uh in whatever uh technology is safe for them. So we have uh we are uh we are having uh we are putting light now bank is putting a light on the regulation now and uh this will I think this will uh make them the market more uh more feasible for our clients because uh we I think we just we just thinking in big corporations but we have a huge population.

Brazil is very diverse and and we have we have to to to attend u to to to have we have as clients such uh big companies and as a farmer in uh that that that uh grows onion or or or corn. So uh we have this this this diverse um type niches of clients and uh the primary role of a bank is to transform uh deposits into credit into in the in the real economy. We we cannot forget the real economy where the the things really really happen. So uh the government will have um a hard work to to not uh to make the system uh keep flowing the the monetary policy uh through the channels which is the from bankness financial system and uh uh and the clients uh just have to know that it's safe uh independent from the technology and and in Another perspective is that we will win. Tony uh asked us how do you win in this in this in this arena?

I think that the the all the choices that our clients have uh may may uh live together. We not we're not talking about uh just stable coins or just uh fit or just picss or just uh CBDC. They will live together. We still have uh teds. We still have uh checks.

People still write checks in Baker Brazil. We have an area that that keep uh that uh operates with checks. So um I I think this is we will live together and our our main main uh work here is to find the use case best for stable coins. The best use case for stable coins.

Yeah, agree with all of colleagues that are speaking here. uh if I would to compliment I will take the Antonio Suda's uh what he he comments at the first moment here about the unique moment that we are living right now all the global countries are regulating stable coin or digital assets nowadays from Japan to US. Yeah. So you asking coming to this place becoming friendly with the change of the go government there is something that is really big. Yes.

And they are coming with the genus act with the clarity act and putting all the regulations in order to have a stable coin running using by as cross body payment using to on ramp in exchange crypto exchange and also for many other use. Yes. But the higher volumes are for cross body payment or something like that which US is strong enough to do all those operations. The tokenizer words still have to evolve in order to have those uh solutions into production and to have the those stable coins make part of the liquidation. So more offchain uh solutions are using uh stable coins right now.

when we come to Brazil, I think we are different from uh the US or from US dollar stable coins. Yes. So we need to find our own use case here. Yes. Uh and with that we we would like to uh congrats our central bank for all the work all the job that he they are doing at least for the last three to four years.

uh come to the market, put everyone together, the public consultations, talking with everyone from FinTech to the financial institution and trying to put the right rule in place in order to uh have all the technology and everything uh evolving but with all the regulations on AML and everything that is very important for this sol the solution to to to develop and to flourish with everything that it has. So for me taking what Stephan was mentioning uh there is more related to have all these standards that we have for other solutions that we have to the merch like the UX the web or mobile apps uh even the facility that of the UX for you to accessing the crypto not having to to have contact with the private key let's say with the metam mask and anything like that you it have to be seamless how you do those stuff. So interoperability will be very very important thing to do even among many uh stable coins in OSGRL or any other. So you have to have this uh the same level playing field for everyone or the same interoperability. It needs to be seamless among all the the uh the technology that we have nowadays.

So that's a challenge still for the crypto world. Interoper interoperability is not something that happens e easily among all the the the the solutions that we have nowadays. So that's something that we have to solve in order to have this running and and have this BRL exchanging for USDT USC and make business flourish in Brazil. So another thing that you mention is tax. I don't think that giving some advantage to stable coin it will enable with stable coin is the technology itself has by the advantage that it has the cost reduction 247 2 plus0 or even final of the day settlement and everything that it provides netting or or something like that and we enable uh stable coin to get their their place the space into the the the financial services into the global services or into the influx super.

So that's my two cents.

Well, I I must say that the way they're speaking about this is extremely interesting and a great eloquence even though they have to speak English because of me because as you can hear I'm Italian but we're here with four uh Brazilian people that are really taking care about this enormous innovation of the market. So uh given the many touch points I would like maybe to give space for the audience to also understand a bit more how are you practically with your firm working towards uh bringing this uh to the uh market. So how given the unique position and also the great efforts from the central bank, the fact that we have picss, we have open finance, how is your strategy through of course the uh means of working of your institution to bring this uh to the market and what do you think that the ultimate market should look at your strategy to get closer to this innovation? Which main problem do you want to solve and how do you think uh that what is this uh suggested strategy that you would say that Brazil should undergo as a whole to make this a really important and vast uh success case that can be seen by the whole world?

Well, I can start on this one. Um in terms of the goal, one thing that I would really want to touch point also uh that Dun said and and Stephan said is regarding fix and interoperability. I think this is one of the biggest challenges specifically in crypto because we have so many currencies. You have uh different multiple stable coins in multiple currencies and all the other digital assets uh that are traded and we do not have as in traditional markets a central uh operator for that a centralizer for that. So uh the the role of a liquidity provider which is uh one of our core businesses here at Kvest uh it becomes fundamental uh in order for this market to work uh correctly because you need to be able to aggregate and and pull out liquidity from multiple different sources, multiple currencies.

So uh if the liquidity provider role which already exists in the traditional uh uh financial markets, traditional finance uh was already important, it becomes uh fundamental for the crypto world uh in order for it to work seamlessly and have a good and and robust use cases uh being whatever. So from from our our end I would say our goal here is is to provide uh stable liquidity uh for institutions and to be able to enable uh solutions to be built on top of that because what wherever you're looking at remittances payments uh liquidations against real world assets ultimately you need uh uh a stable and trustworthy source of liquidity uh in order to do that. So that's uh one of our focuses and one other thing that that I believe is that Pix uh represents a huge advantage uh for Brazil in terms of uh uh global comparison because uh the the integrations if we're able to integrate it seamlessly we can uh promote even more uh uh uh banking inclusion for the population and but I also do agree that we need to abstract this to make it as simple as possible as Adul had uh uh to be able to an everyday user to be able to understand and use it and trust it. So all of this comes together with the regulation with having stable sources of liquidity and you need all of those different moving parts working correctly uh in order to thrive with a solution and have a a big use case for for this market.

Yeah. Um our main main goal uh is to abstract all the the the crypto lingo for our clients and and make it easy. Uh we see as as pix was so so rapid adopted not in years but in months and uh transacts like a trillion per month in in transaction is the easiness. uh the user could test with 1 cent 10 cents and and test if the pix was uh working if it work for him. So uh our main goal is is to to create products now uh with a layer of blockchain uh with trust as I said earlier uh that our clients expect from from a bank.

So uh with trust and with the abstraction of the all the the the difficult and complexity of interoperability or or of uh passwords and and and and other uh things that we we see now in the web3 space. So uh our main goals is this abstract to the uh all Brazilians that can have some experience in web three in crypto or in another u solutions like stable coins or or whatever and and but with this easiness to to use this UX that make it clear what he's doing why he's doing and why is better for him that the solution it's for him the solution He's he's looking for

very good ourselves as B3 we are the infrastructure of the market and we have it as our DNA. So our intent is to continuing providing this infrastructure if even in the digital assets ecosystem stable coins or even regulated assets or all the digital other digital assets. Yeah. So the path that we are following is start with the regulated market. We start with ETFs.

We were the third country that were approved to trade ETFs. We had our our futures here. Bitcoin, Ethereum and Solon as well. We have all the derivatives as well on our traditional market. It enables the institutional investors to have exposure to all those ecosystem and to flourish the ETFs at the end of the day and ups investing in the uh spot market at the end of the day and help the volumes and everything.

You saw what happened when the HFS United States were approved. Yeah. And also we start with betraistas providing access and infrastructure like like a Lego is a collaboration of the holy mar helping the mar to have access to all uh those assets. So we depend of on each other here. So a lot of friends here enabling all the stuff that we are doing in the march.

Yes. So enabling the institutional uh and also their client to have the access to crypto or even to uh stable coin and whatever uh the digital asset is. At the end of the day we are working uh in the other fronts in our core as well. We are working with token with regulated assets tokenization nowadays and also Vat just mentioned that we are working our own stable coin as well. So B3 yeah uh we will launch it like as soon as possible.

I cannot do give provide a spoiler right right now but the stable coin way to cash many stuff like 247 settlement where the demand of the march is in which technology it is requiring and everything. So the our point of view is that the market will guide us where the the the demand is for the technology or for the coin or for whatever it is. Yes. And another thing that we are exploring is the offchain use of those stable coins as well as well like collateral for transactions uh in diverse settlements of 247 markets leaving stock or regulated markets and and all this stuff. So hopefully we we will be successful in the future.

Yeah, I'll be the last one. I think uh our goal is to to be uh the infrastructure we we provide the uh currently for the six tier one banks in Brazil we have pro we are providing the infrastructure for three of them uh directly or indirectly but I think it's uh and soon there will be the fourth and um and this helps a lot uh to evolve the product I think the partnership we have with clients helps the product to evolve uh there's always a a gap between uh the capacity whereas when when you building technology there's always u that oh we always feel that we're behind because it takes time to develop right to to develop a robust infrastructure we've been processing uh 10 million transactions per month and mission critical 24 by7 touchwood never had a major issue uh the security is a must so we want to continue to build this trustworthy uh infrastructure um which which is relevant for the market and and now the next step and there was announcement XP launched their USDXP uh stable coin through through our infrastructure we're launching the capacity for banks financial institutes in payment institutions to tokenize deposit and settle transactions with the tokenized deposit or stable coins uh in BRL in any currency and this is the future we see uh we really creating this foundation infrastructure to allow a financial institution, a bank, an investment platform to really operate uh with digital assets as a whole. Um and I think this is the the next phase and uh we believe that the market will shift uh for banks, financial institutions to provide onchain uh banking services. That's where uh our focus will be. Uh what I mean by onchain banking services, sooner or later you're going to have an onchain effects.

So a BRL stable coin converting to a USD stable coin but not the way it's done today because the way it's done today there's a gray zone there's no effects registration with the central bank there's not so the way we see it is uh bank banks effect desks providing liquidity to uh automated market makers and making the registration of the fax with the nature of the effect transaction with the central bank u as per the regulation and that's uh where we're focused seem to uh for the next phases. Um also uh with the tokenization elements that uh uh B3 mentioned you know uh bonds uh whatever it is um I think there will be a clear view for onchain lending uh using uh collateral as uh tokenized assets like collateral but not tokenized assets that are being tokenized by someone took asset that is being registered by the Brazilian stock exchange on the central depository and that as asset then becomes a first asset that someone could lend money against it and I think this is the next generation that we've been focusing um and on creating the infrastructure to allow the institutions to use and uh that's what excites me when when we started building this infrastructure we said one day this is going to happen you know a bank would will provide liquidity into a automated market maker fax protocol uh and so on and there more sophistication right I think uh as do mention on B3 uh the core business of the exchange will change in one day. If you look uh what happened with like hyperlquid for those who are familiar with hyperlquid is an onchain um you know uh derivatives and spot trading uh onchain. So the the order book is an onchain order book. It's very efficient, very sophisticated.

It's unbelievably change the way the traditional market would work. uh for instance they have perpetual we don't have perpetuals on the on the existing trady derivatives and I' I've seen this this shift from the trady will will work we will use this technology that's already being used in the defy space to to transform financial markets as we know

well I have a very difficult question now because the level is getting higher so we must challenge them a bit more h so far I think that it's been very very interesting And I want to thank a lot for your attention. I see many many interested people also in the audience and uh I would like to pivot to another level of tokenization of assets right stable coin it is per se a tokenization of assets. The mechanism we are seeing at this panel is very easy. So lowering the BRL use through the use of US stable coin of course pulls monetary policy towards a forced drop into the uh local liquidity and then a mechanism that of course uh uh put less lending and the hikes of the sell rate. Now I would like to ask you if you think that tokenized bonds or uh tokenized deposits or if you think all this wave of tokenization if it's going to happen fast that it could very very possible that this 2026 and 2027 we will see an enormous spike of this use of these tokenized assets can make uh the uh can fix let's say this uh forced monetary policies that can happen through the fact that stable coins in dollars are getting more provenent.

There is less liquidity, interest rates are higher or can make it worse. If I will take this one. Yeah, I I am not that uh I I don't think that it will happen like as fresh as as we we are think here one or two year. I am more of a five to to 10 years to 20 years. Yes.

uh that's my take uh I think there is a lot of to go given to the regulatory space laws and everything that have to evolve in order in order to enable everything that is happening. Genus act was launching is still being worked with like all the federal agencies and and everything. Uh the the law in Brazil for issuers of stable coins are still uh being discussed in in the congress for example. So a lot of things is to to go but we that have been working this work in this workplace for a long time we are resilient we know that this takes time and we know that there is a lot of job to be done here and of course we will working out of those fronts. Uh I I believe in what Vidato mentioned here.

I believe in the flow of funds and everything and even credit you you can take credit from another country that because they can have access to money with different rates and everything and the the end of the day the guys that will be dealing with risks we however is the risk or or risk of effects and everything uh that that they that will be the end game that will generate value at the end of the day the the champions uh will be the the institutions that will be providing the best service at the end of the day. So also to have access to investing assets abroad like Europe, Russia and everywhere. I think that blockchain enables it as well but it is a just future game that you will you need to build block by block in order to get in there. Yes. And you are being part of it.

Yes. I think it's advancing really fast. We know the expon exponential effect of things happening. We hope that it happens sooner than than later. But yeah, that's my

agreeing with with uh Eduardo. Um I think this is uh as Virat said, we are making the plumbing now. We are plumbing the system and and changing some some infrastructure. But uh for this this market which uh is 24 for7 uh we have some institutions and and and companies that are not prepared to work in a 24/7 uh market. Uh we still have like in in in exporting.

We have to to fill some forms till like uh five or or 7 p.m. to the to the central bank so they can allow you to export and everything. Uh but I think we are forming this this perfect perfect storm that will allow uh the the the solutions we are discussing here to to get the main street to get the people to use to to to transact uh in blockchain and um uh as I I said earlier I I really believe that this will live along with uh old solutions or or thread solutions. Uh it's not disappeared.

It's not a a a thunderstorm and and we make it we all be on blockchain. I think uh this will uh take a little more time that we expect to that to make this this this shift to all in blockchain. We still have a lot of a lot of questions not answered not saying even by the market or by the regulator. we we need to to work on these questions uh to to make that shift.

I think uh you know we've seen some uh big transformations in the uh landscape of fintech in Brazil over the last 10 years. I remember I was working in a bank and all of a sudden there's this app with a purple card and everyone is joking, oh this guy don't go nowhere, go nowhere. They're the largest bank in in the world now. Uh no, I'm talking about no bank. Everyone displaced then right.

So and they started with a completely different approach. Perfect UX, no branch, no physical branch, easy to use and people adopted massively. So I think the challenge that the existing uh players will have to deal with legacy and it's part of the game is for those new entrance. Um we seeing you know I think they're they're around here cast uh they used to use our infrastructure it's a neo bank backed by pure stable coin they don't have the legacy system fiat etc and in 18 months they have 30 million clients like huge volume spreaded all over the globe um so I think um you know um the existing institutions if they are not prepared uh to cope with this they will stay behind and uh unfortunately that's that's the game and we're seeing this probably there will be uh new institutions that will come with a fresh start with a abundance of capital and will you know dominate the space so we seen I think Brazil had like four waves before this first wave was dem democratization of investments who led that XP no one was doing this XP was created and dominated the distribution of investments still today. Second wave was basically uh the the neo banks right using a regulatory arbitrage to the investment uh the the the payment institution new bank started and became the largest one right then the third wave was the bank as a services for those of who are familiar with uh before you know few years ago you didn't have bank as a services and what what allowed uh fintex to exist new lending platforms etc the bank as a services and there are some out out there stock bank, cellcoin uh BTG provide the uh bank as a service there's a big shift in the market and then uh recently over the last three years we had the wave of uh lending as a service who is leading it ke you know for those who familiar with ke is leading the the landing as a service it grew it worth like $2 billion 10 billion ris in four years five years right and the fifth wave I see it's going to be the the wave to me of the tokenized world um where the combination of this this whole thing it's happening.

So there might be that some and and and the thing is which is different now um a lot of uh players dismissed or say oh this is forget about the purple card forget about this bank as a service forget about this they're not going to succeed when we saw they're massive companies taking clients from the existing players the difference now with this fifth wave is that the the existing players are paying attention tremendous not to lose the not miss the opportunity before they they missed it because yeah forget I remember we're discussing at the bank oh this purple car go nowhere forget about it all of a sudden it took a lot of clients so I think the difference this fifth wave will be interesting to see is the um obviously the fight or the the moving parts that will happen but this is this will happen uh for sure

yeah and to compliment my colleagues here I agree great many part of what they said. I do think this is going to take a little bit more time than we expect. Uh it's going to be a gradual change. It's going to have to be integrated and and running parallel with legacy rails. I don't think it's going to be like uh Stephano said a flip on the switch and everything goes on chain.

Uh it's going to be a process, but once once it it gets traction, we'll see fast movements. I think the focus right now is how to build a good foundation and a good base uh uh uh that's trustworthy and and and have something that it's uh uh uh very friendly for uh uh the players to build on top of and to and to which is going to allow three four five years from now for us to ramp very quickly. So the focus right now should be the the the structure and how we're setting up the base of everything uh which encompasses everything from regulation from the current players in the market. How are they looking at it? power to develop me developing this and uh uh with the integration with the current uh uh uh financial institutions on what Vidato said is interesting from the waves and I agree 100% uh uh and I think history repeats itself and uh what have we've seen in crypto who's been in this market for a very long time uh also saw this factor of uh disbelief and discredit uh onto the blockchain in crypto market as well.

So I think we right now we're kind of over that that heel already where most institutions and most players in the market already see the huge value and that the inevitability of uh uh these solutions integrating part of the financial uh financial market and uh not just the financial market but other markets as well and uh I think it everyone sees this as a inevitable path but I do think we are not one or two years uh from massive ive adoption. I think we're more in terms of five years, but it all depends. We can be it's a very dynamic market as everyone knows uh things change very fast. So we might be surprised in a positive way and see uh ramping up quickly of these solutions uh faster than what we expect. But I do think we have a a long and not easy way, not simple way, but uh I think it's it's inevitable.

Well, uh I think many interesting points uh have been shared again and we can see also the complexity and how many different institutions are play such a different role. So it's uh really something that will take a lot of study and we are moving forward uh towards the end of the panel. So we are going to now have a just last round to understand if you have something else to share uh that you would like to touch upon before uh closing up with the audience. Meanwhile, I really want to thank Merch for this great organization on my team, Sylvia. She made everything and and so far the experience here in S.

Paulo has been amazing. So to the audience, do you have any last thing you want to say? a promise, a risk, an opportunity, a joke. Please share whatever you like. Um, my last my last two cents, it's about uh to reach that flipping point or tipping point.

We need to to sit down as an ecosystem and uh and create the the the patterns. Uh I'm talking about uh um interoperability. So uh to prevent uh liquidity pools. So I have my tokenized asset uh in my chain. But you have your own tokenized ass in your chain and this this will not be good.

This is this will be risky for the for the market and for the financial infrastructure. If we have this this this uh liquidity drains and pool uh we have to to to converse and converge to a a a pattern like like other other uh technologies have uh ISO EO norms and and other stuff. So we have to sit uh as a market and and and players uh with the regulators to to define this this this this infrastructure uh patterns for for the the market.

Yeah. On this point, I also have some nice use case to to point out and uh we have recently launched and we distributed in in Foxbeat uh a tokenized bond uh which was a PMX bond uh was one of the first I believe and it was made through CVM88 uh which is a crowdfunding uh offer uh but it falls into the the issue that we have today on this the current framework and of First, we're working together with the regulator to change this. And uh but the current framework, it it stays in a pool like Stephano said, right? The CVM88 prevents you from having uh uh that asset in multiple uh uh platforms and and and being able to liquidate through those platforms and uh give liquidity throughout them. You can you are only restricted to one.

And of course this restricts a lot of of the advantages that uh we are projecting and we see as inevitable in in the space. So uh I think this reinforces like it's important that we put use cases like this to test the technology. So all the the amortizations and yield is paid uh directly on chain through uh smart contracts. But uh we also have a long way to go for this solution to uh reach everything that it can offer uh and all the potential that it has. Good.

So, thanks a lot for this amazing audience. Your attention has been uh wonderful. Join me with a big applause for our panelists, Marcos, Eduardo, Stephano, Gillier. Thank you very much. You gave a lot of value today.

And please stick to the next palent. It's going to be amazing. It's going to be Veronica, Victor, a lot of great people speaking as well. Thank you very much.