The BRIC economies have been strongly tipped to reshape the global financial landscape, but the potential of Brazil and Latin America has yet to be realized. Could a new digital currency designed to work with local currencies open up a wealth of cross-border opportunities?

“I really think cross-border payment is the next agenda, the next frontier,” said Jean Pesme, global director for finance, competitiveness and innovation at the World Bank, during The Development Podcast. Another international development priority, says Pesme, is to use blockchain to promote financial inclusion and faster remittances.

For many business owners who export products, it’s hard to contemplate the idea of ​​having to wait weeks for payment. But this is the situation faced by entrepreneurs in Latin America. “It depends on cash flow, and there’s a lot of uncertainty. You can’t know where your money is and how long it will take to get paid, so it’s a matter of waiting for the business owner,” Gilbert Verdian, Founder and CEO of quantum networkhas explained.

According Deloitte, a complete structural transformation of the LATAM economy is needed to fuel growth. World Bank says there is ‘enormous potential’ in renewables electricity, but the most important transformation could come from accelerated digitalization, which could create job opportunities and boost financial services in the region. Verdian wants to be part of this transformation, and it seems certain that blockchain, the revolutionary technology behind digital currencies that promises to automate transactions and transform industries, will play a key role.

THE STRONGEST LINK IN A NEW CHAIN

An ambitious project called LACChain is designed to help Latin American businesses do their banking better and has the potential to be transformative, including increasing banking inclusion.

LACChain uses blockchain and integrates it into core banking infrastructure, allowing users to immediately receive payment in the form of a new digital Latin American dollar and then exchange it for local currency at their bank. “Real-time digital assets make it possible to get paid instantly. All users need is a phone,” says Verdian.

“Not only will this make it easier for people to send and receive payments, but more importantly, it will allow them to access new markets because LACChain is cross-border,” says Verdian.

This means businesses can not only sell to local customers, but also access new ones in the 12 countries where LACChain payment is accepted, helping them grow. Moreover, the new digital currency will eliminate a lot of friction and risk when doing cross-border transactions. “You don’t have to worry about currency fluctuations because it’s the same Latin American dollar,” says Verdian.

His company’s technology helps make this possible.

A QUANTUM LEAP

The LACChain project started in 2018, but Quant joined in 2021 to solve cross-border payments, domestic payments, and remittances using its Overledger blockchain platform.

Quant led the ISO TC307 Blockchain standard adopted by 57 countries and organizations worldwide and solved interoperability with the creation of one of the world’s first blockchain-agnostic API gateways, Overledger. It has proven to be so successful through the use of low code, which allows users to create smart contracts and interoperable tokens cheaply, easily and in minutes instead of months, as it does not require the use of specialized programming languages.

“Through our Overledger Gateway, we enable participants to connect their private, public, and permissioned blockchains to LACChain. Networks and DLTs that were siloed can now connect,” says Verdian.

Smart contracts and interconnected tokens can be used to do more than transfer money across borders. For example, they can also be used for supply chain traceability by symbolizing inventory and raw materials to track and ensure products are produced sustainably.

FORGING A CONNECTION

Interoperability between disparate blockchain ledgers is a hot topic in the blockchain world. Oracle certified the Overledger Gateway as an interoperability solution for its Oracle Blockchain Platform last year, enabling its customers to more easily orchestrate transactions spanning Oracle Blockchain and other authorized and public blockchain ledgers. . “It’s powerful for Oracle customers because they get best-in-class technology, and it’s been good for us because we’ve seen a big increase in incoming inquiries and referrals from the Oracle team,” says Verdian.

The partnership began when Quant joined Oracle for startups in 2019 and enabled the scaling startup to tap into Oracle’s customer network, resulting in new customers in the financial payments and energy industries. “It’s a win-win. Oracle manages to differentiate itself and provide an innovative solution to its customers, and we work with Oracle and our customers to solve business problems,” he adds. Since certifying the Overledger Gateway, the two companies have worked together in the IETF TC/307 Blockchain Interoperability Task Force to advance much-needed standards in this area.

CONNECT THE FUTURE

LACChain is a great example of how blockchain technology can improve financial inclusion, digitization and drive the evolution of new technologies in Latin America and beyond.

About 1.6 million people have already directly benefited from its services* so far, with the payment and trading element of the project powered by Quant’s technology expected to go live in 2023, according to LACChain.

“It has been over a year since we began an ambitious line of work with Quant to enable a tokenized money solution on LACChain,” says Marcos Allende Lopez, CTO of LACChain. “As a committed partner, they brought exceptional expertise and technical skill to the project.”

Quant’s work with LACChain to support interoperability and secure the creation of smart contracts facilitates a range of use cases to help communities sustainably build the digital infrastructure of the future. “That’s when local businesses and citizens can actually start trading, and they’ll have the wallet on their smartphones and be able to use LACChain like any other app,” says Verdian.

As if connecting 12 countries was not enough, Verdian and LACChain have a broader vision, where LACChain will be able to connect to other regional DLT ecosystems in America, Europe, Asia and Africa. “We are already seeing the beginning of regional business networks,” he says, but Quant wants to see a time when all of these closed-loop ecosystems are connected into one big global business network.

“Although blockchain technology is still nascent, as more companies, institutions and governments adopt it, its potential can be fully realized.”

Then the world is an entrepreneur’s oyster.