The First Bank-Issued Stablecoin Emerges Out of Latin America

The largest investment bank in Latin America, TG Pactual, has launched its first stablecoin. However, the move comes as an increasing number of countries ramp up efforts to distance themselves from the dollar.

On April 4, BTG Pactual announced the launch of BTG Dol. The investment institution claims that it is the world’s first dollar-backed stablecoin from a bank.

According to the announcement, the BTG Dol will be backed by USD and issued on a 1:1 basis. Furthermore, it will be issued through the bank’s crypto platform, Mynt.

It stated that investors and users will be able to ‘dollarize’ part of their equity in a simple, efficient, and secure manner.

The stablecoin will be custodied by BTG Pactual. The bank will guarantee its backing, provide network security, and carry out due diligence. It will also be responsible for money laundering prevention and compliance processes.

Dollar Hegemony Distancing

Head of Digital Assets at BTG Pactual, André Portilho, commented:

“Once again, we are innovating in using financial technology in our clients’ benefit. When buying BTG Dol, investors have access to an easier, safer and smarter way to invest in dollars.”

The Mynt platform currently enables trading for 22 cryptocurrencies. The stablecoin launch shows that the “bank trusts technology and will continue with its commitment to offering new innovative digital products and services,” said Marcel Monteiro, Head of Operations at Mynt.

Conversely, banks in America and the United Kingdom are shunning digital assets and firms associated with them.

Furthermore, the stablecoin launch comes at a time when dollar hegemony has come under threat as pressure on the U.S. economy mounts. There have been several moves to distance from the dollar over the past week or so.

Late last month, China and Brazil agreed to carry out their massive trade in their currencies. This would cut out the greenback as an intermediary. China and Russia are already using the yuan for trade.

China and Malaysia are also moving on discussions to form an Asian Monetary Fund, according to reports. This would help them distance themselves from the dollar and the International Monetary Fund.

In late March, a Russian state official talked up a new BRICS currency. It would be primarily used by bloc members Brazil, Russia, India, China, and South Africa.

Stablecoin Ecosystem Outlook

The stablecoin ecosystem is currently worth $133 billion, according to CoinGecko. Additionally, the majority of that is in dollar-pegged assets.

Tether’s market share has increased at the expense of Circle’s USDC and Binance’s BUSD. Tether now commands a 60% market share with $80 billion in USDT circulating.