Brazilian bank Embraces Cryptocurrency Assets With Its Own Token ReitBZ
Brazil’s Banco BTG Pactual SA is the latest bank to join the world of crypto assets following the precedent set by JP Morgan by having its own security token. The bank is planning to receive over $15 million in an initial offering dubbed ReitBZ.
In an interview the chief technology officer of the bank, Gustavo Roxo indicated that the offering will be backed with its distraught real estate assets in Latin America. The token will employ blockchain technology in form of the decentralized public ledger for transactions.
ReitBZ available to all investors except for U.S and Brazil
The token can be purchased through a digital platform that uses the Gemini dollar which is considered to be a stablecoin. The Gemini Dollar is pegged on the United States dollar or Ether which is considered to be the most prized crypto. BTG has said that investors should expect to receive periodic dividends from the recovery of distraught real estate assets and this will be handled by Enforce. Investors from across the globe can access the token with the exceptions of those from the U.S. and Brazil.
Projections indicate that returns will be between 15% and 20% in Brazilian currency since the investment will not be hedged. The bank is expected to offer Market-making services for its token as a way of giving investors the necessary liquidity to sell. Roxo was quoted saying that the company will deploy its capital to offer liquidity because BTG believes in cryptocurrency business. He added that the structure was influenced by the notion that digital investors are high-risk takers.
The venturing into crypto assets is seen as a way of enabling the bank to cater to its real estate business that is already distraught to global investors cheaply than the normal conventional means. The ReitBZ will be continuous with the initial offering period lasting for 90 days from which the proceeds will be put into the distraught portfolio.
More financial institutions joining cryptocurrencies
BTG is not the first bank to venture into crypto assets because JPMorgan Chase and Co have already developed a digital coin that they intend to use in speeding up payments of corporate customers. It is the first United States bank to introduce its own security token. Equally Japanese lenders such as Mitsubishi UGJ Financial Group have been working on crypto initiatives such as MUFG coin that got initiated in 2016. However, cryptocurrencies have witnessed uncertainty in the past year with Bitcoin dropping over 80%.