Brazil’s President Halts ‘Indigenous Cryptocurrency’ Project

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The Brazilian government has reportedly shut down a crypto-related project that would have seen the country develop an “indigenous cryptocurrency.”

The revelation came via a social media update from Brazil’s new President, Jair M. Bolsonaro.

He made the remarks when he criticized the “BNDES black box,” a reference to contracts ostensibly linked to the National Bank for Economic and Social Development.

The federal bank has associations with the country’s Ministry of Development, Industry, and Trade and is primarily tasked with spearheading development within Brazil by providing financial aid to projects.

“Indigenous crypto” project halted

The “indigenous cryptocurrency” was a $12 million project that has been halted because it flouted expected bidding principles. It is alleged that the traditional bidding process wasn’t followed when awarding the contract.

According to reports in local media, the contracts are said to have been improperly issued- both for the National Indian Foundation (Funai) and the country’s Fluminense Federal University (UFF).

On January 2 this year, Damares Alves, Brazil’s Minister of Human Rights, Family, and Women suspended the contract in question and vetoed proposals for an indigenous crypto.

Estadão, a local news outlet, reported that the suspended R$44 million contracts had been signed on December 28, 2018, just three days before the former president Michel Temmer’s term came to an end.

The contract was purportedly looked at as being “bulky” because of the enormous amounts of money involved. The news outlet adds that those funds were, however, not just for developing a cryptocurrency. They would have been used to develop other solutions including a “territorial database” and functional mapping.

According to the report, the crypto project was seen as an “innovative idea,” one that would have led to an “alternative currency for the natives.” the general take was that such currency was capable of positively impacting Brazilian people’s reality.

Funai’s president Wallace Bastos had earlier noted that though the contract wasn’t assigned via the desired traditional bidding process, those involved had applied a “Decentralized Execution Term.”

On why the contract took effect so close to Temer’s exit, Bastos said that the required resources were only availed in mid-December after the approval of the required Bill.

But as Portal do Bitcoin reported, the Funai chief’s comments failed to clarify what Bill he was referring to, nor gave precise information on which on any other firms that would collaborate on the project.

Even claims that the UFF got the nod for its “expertise” in such projects rang hollow after reports in Globo suggested the company’s employees had expressed reservations about the project.

The news outlet stated that sentiment among the firm’s workforce was to the effect that what Funai had set to work on was of “questionable technical relevance.” Sources are also reported to have noted that the company had hired people without the proper technical know-how to work on the project.

The crypto industry has experienced remarkable growth in the region despite numerous challenges that are mostly linked to struggles with financial institutions.

In 2018, several cryptocurrency exchanges faced difficult times after local banks closed their accounts citing regulatory concerns. Bitcoin Max, one of the affected exchanges, did, however, get a court order that forced the bank to reopen the crypto platform’s accounts.

The last few months have also seen Atletico Mineiro, a football club in the country launch a cryptocurrency that would be used by its fans.

In December, the Oásis Supermercados began accepting crypto payments in Bitcoin (BTC), Bitcoin Cash (BCH), and Litecoin (LTC).


Disclaimer: This is not investment advice. Cryptocurrencies are highly volatile assets and are very risky investments. Do your research and consult an investment professional before investing. Never invest more than you can afford to lose. Never borrow money to invest in cryptocurrencies.

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