Brazil’s President promises to Open “black box” Amid Scrapping of Indigenous Cryptocurrency Project

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Brazil’s President promises to Open “black box” Amid Scrapping of Indigenous Cryptocurrency Project

On January 7, 2019, Brazilian President Jair Bolsonar tweeted that the government was going to open a “black box” into the operations of the national development bank, days after an Indigenous cryptocurrency project was halted.

The Project

In late 2018, there were plans by the Brazilian government to launch an indigenous cryptocurrency, building significant anticipation for its launch. However, due to the recent change in government leadership in Brazil, these plans seem to have been scrapped. Before the government intervention, which is now led by Jair Bolsonar, there were plans in place to create a currency to facilitate exchanges between indigenous communities.

The project had been generating some buzz around the various communities until the new Minister of Brazil’s Ministry of Women, Family and Human Rights, Damares Alves, suspended the contract for the creation of the project.

The project involved the National Indian Foundation (Funai) of Brazil giving over $10 million to the Universidad Federal Fluminense (UFF) to develop a cryptocurrency which had already been dubbed the “Bitcoin of the Indian.”

The project would also include the “study and diagnosis of socioeconomic viability of the creation of an indigenous cryptocurrency; development of the cryptocurrency platform; and implementation of that platform,” according to local news sources.

The project was approved barely three days before the new government assumed office. However, this new government feels that the contract was carried out improperly and that the expenditure involved was too large.

The President Speaks

With the chaos going on, the president of Brazil has spoken about the matter by taking to Twitter. Rough translation provided by Google:

“With only a few days of government, not only the black box of BNDES, but other bodies are being raised and will be released. Many contracts have been dismantled and will be exposed, as the $ 44 million to create indigenous crypto that was barred by Minister Damares and others.”

In the tweet, the states that the government will open a ‘black box’ of all the contracts and projects relating to BNDES, Brazil’s economic development bank.

Government and Cryptocurrency

One of the ways by which the Blockchain and cryptocurrency industry has made progress is by rallying governments behind them and gaining their acceptance. Progress has been made in that regard, with nations like Venezuela even adopting a controversial national cryptocurrency. There has also been significant adoption of blockchain technology by governments for projects like the registration of public land.

However, the downside of relying on government legislature to push the progress of blockchain and cryptocurrency is that it leaves the industry at the mercy of government establishment. In cases like this, the project had been greenlit but a change in power has led to it being scrapped. Ironically, cryptocurrencies were founded on a desire to have freedom from centralized authorities and not have the constraints of fiat currency.

Regardless of whether the indigenous currency eventually takes off or not, there are certainly lessons to be learned.

Tokoni Uti

Tokoni Uti is a writer with several years of experience whose work has appeared in the Huffington Post, The Los Angele Free Press, The San Diego Free Press, Genvieve magazine and Blockchain Reporter.

She holds a degree in accounting from Bowen University and lives in Lagos, Nigeria.