Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche


What value does the Brazilian Digital Token have?

The Brazilian Digital Token (BRZ) was the second most trending cryptocurrency on CoinMarketCap on 18 May 2021.

So what is the Brazilian Digital Token? The Brazilian Digital Token is a stablecoin that is worth one Brazilian Real. The Real was worth 19₵ on 18 May 2021.

In contrast, CoinMarketcap gave the BRZ an 18.18₵ Coin Price on 19 May 2021. Hence, Mr. Market thinks the Brazilian Digital Toke is worth slightly more than the fiat currency. So what is the Brazilian Digital Token and how does it work?

What is the Brazilian Digital Token (BRZ)?

The Brazilian Digital Token (BRZ) is a cryptocurrency built on the Ethereum, Solana, and Alogrand blokchains. Thus, the BRZ is compatible with ERC20 stablecoins,

They build most stablecoins with the ERC20; or Ethereum Request for Comment, technology. Thus, the BRZ could be compatible with most blockchain tokens because ERC20 is the most common kind of blockchain token.

Like all stablecoins, the BRZ contains a Smart Contract (digital robot) that releases funds from a reserve account when you spend a Brazilian Digital Token. The BRZ website claims they will maintain price stability by having Reserve Managers that hold Real in reserve. Market agents will ensure the BRZ’s stability by maintaining a steady supply of Real.

The hope is that Brazilians can use the BRZ to participate in crypto markets without buying cryptocurrency. For example, a Brazilian shopper could use BRZ to pay for items she buys from an American e-commerce platform.

A Brazilian Real Stablecoin

Similarly, they hope international exchanges and platforms will use BRZ to enter the Brazilian market. For instance, a British game platform could accept BRZ payments from players in Brazil.

Another hope is that investors will use BRZ to hedge their holdings in Brazilian reals. For instance, an American hedge fund could buy BRZ to hold as a hedge against a decline in the US dollar.

Transfero Swiss created the BRZ Token. Interestingly, Transfero Swiss hired the law firm Carvalho, Machado and Timm Advogados, to prepare a document that proves Reals back BRZ funds.

What Value Does the Brazilian Digital Token have?

Mr. Market gives the Brazilian Digital Token (BRZ) a lot of value. CoinMarketCap BRZ a 18.18₵ Coin Price on 19 May 2021.

In addition, the Brazilian Digital Token had a $180.74 million Market Capitalization, a Fully Diluted Market Cap of $180.074 million, and a 24-Hour Market Volume of $6.421 million on 19 May 2021. I think these numbers show there is a market for the BRZ. They based those numbers on a self-reported Circulating Supply of one billion BRZ.

Hence, I think the BRZ offers some genuine value. However, the Brazilian Digital Token is not for everybody.

I think the BRZ could be an excellent tool for investors and speculators because it offers some real world value in the form of the fiat currency of a major nation. Brazil is the ninth largest economy in the world with a Gross Domestic Product (GDP) of $1.87 trillion.

Historically, Brazil has been a politically and economically unstable country with a record of hyperinflation and military dictatorships. Trading Economics estimates Brazil had an inflation rate of 6.76% in April 2021 up from 1.88% in May 2020.  

Betting on Brazil

NPR labeled Brazil’s President Jair Bolsonaro a global health threat because of his failure to deal with the Coronavirus. Brazil had the second largest COVID-19 death toll of 439,379 deaths on 19 May 2021, Worldometers estimates. Higher than India’s 286,952.

Hence, Brazil is a country in terrible shape that could get worse. Yet, it is a rich country with enormous markets and vast amounts of natural resources. Consequently, I think the BRZ is an interesting speculative investment. People who buy the Brazilian Digital Token bet Brazil will recover and prosper.

If you want a speculative cryptocurrency backed by a real-world asset, the Brazilian Digital Token (BRZ) is worth investigating. All speculators need to investigate the BRZ could because I think be the model for future stablecoins for lesser nations. If yare seeking an alternative to US Dollar stablecoins such as Tether (USDT), the BRZ is worth a look.