If blockchain is the next frontier in technology, Brazil may be one of its greatest testing grounds – and not only because of its continent-wide size. Blockchain presents totally new, pioneering solutions to very old problems, and South American has a lot of both.
Brazil has boasted some legitimate technological edge that other, more developed countries are only beginning to adopt, like the electronic
ballot machine. But it also faces bureaucratic challenges unseen almost anywhere else. A case in point is the system of land registration. Disturbingly archaic, the property registry system in Brazil is done locally by a notary public office. It is a fragmented, non-communicable system that makes verification of ownership risky and uncertain. A notary public office, or cartorio, is also responsible for civil registration of marriages, births, deaths, adoptions, emancipation of minors, validation of signatures and contracts. For each of these functions, the level of manual, non-automated paperwork is staggering. In a study of land registration in Brazil, the World Bank concluded that it takes an average of 13 steps for a buyer of a non-disputed land property to get it registered. But blockchain is already being tested, and the results are out.
In 2017, Ubitquity, a company from Delaware that offers blockchain solutions for real estate titling, partnered up with the Brazilian government, the local notary public office and the University of Pelotas to implement electronic registration of properties in Pelotas and Morro Grande, two cities in the southern state of Rio Grande do Sul. Blockchain land titling will be even more important and transformative when it comes to properties in unregulated areas, mostly the ones known as “favelas” – often hillside communities that grew organically and informally, with no public services and no documentation. Most property owners in those areas are considered legitimate owners by local law, but they lack the necessary paperwork to make those assets liquid and available as collateral for loans, as well as presenting proof of ownership for the opening of bank accounts.
In the presidential elections of October 2018, blockchain PR was vented as the solution for several problems, but it got to be actually used for the first time as a tool in campaign finance. Marina Silva, the world-renowned environmentalist running for president, used the platform Decred for the crowd-funding of her campaign with the stated aim of making her donations and finances sufficiently transparent.
In June 2018, the Brazilian Central Bank announced PIER, a new blockchain-led platform for the communication of data between financial regulators. Developed by the Central Bank’s own IT department, the system will further data exchange between the bank, the Securities and Exchange Commission (CVM), the National Pension Funds Authority and the Superintendence of Private Insurance.
Banking in Brazil presents particular challenges, and blockchain could revolutionise a system that acts almost like a cartel where there is very little and genuine competition.
Companies liked Boston based Airfox have launched in Brazil with a clear aim of challenging the status quo by providing services which will offer financial access to millions unbanked individuals in Brazil.
Although still shy of the necessary regulation for cryptocurrency trade, Brazilian companies are incorporating outside of the country to allow for local trade. Wise&Trust, a Brazilian digital assets investment company, is based in Delaware to allow legal security for its clients. Yet according to Ruda Pellini, Head of Business Development, the lack of regulation is not preventing investment in digital assets, and there are more investors registered for trade in cryptocurrencies than in the regular stock exchange.
For Luiz Hadad, Community Designer at EOS Rio, “Brazil and Latin America represent a huge opportunity for blockchain and DLT (distributed ledger technologies). Many problems in the continent are due to the lack of trust in governments and institutions, and all that
could be solved by the application of blockchain & consensus protocols, impacting millions of people’s lives.”
Blockchain is also being applied in health services and the Brazilian startup EverSafe promises a reduction in public health costs of up to 35% when fully implemented. Until now, a person’s health history in Brazil in practice belongs to each hospital where the patient has been treated. And because local law does not allow for the sharing of health data between hospitals, this guarantees privacy but also hampers proper follow up and accurate diagnosis. With the EverSafe platform, health history and diagnosis would be centralised in a blockchain and become the de facto property of each patient, who would then sell or allow the use of their information by hospitals, public health services and insurance companies.
With the largest forest and biodiversity in the world, Brazil is also discussing the tracking of reforestation projects with the help of blockchain. Agribusiness in Brazil, one of its biggest sources of foreign revenues, is also investing in blockchain for the tracking of animal products all the way from origin to supermarket.
Even where Brazil has been ahead of most other countries, like voting, can be improved by blockchain. Rife with accusations of vote-rigging, especially in the recent presidential election of 2018, the rather futuristic electronic voting machines can soon become a thing of the past with the harder to tamper blockchain platform. Politically, the innovation can help in other areas too. Brazilian constitution allows for any public petition supported by 1% of the electorate to be debated in Congress. With blockchain, petitions would become more transparent and immediate. The public referendum could also be made more common, if for nothing else because of their cost. According to TSE, the Superior Electoral Tribunal, any public referendum costs the State R$500 million ($140 million US dollars). The speed and ease of consultation via blockchain is yet another way in which things might change as radically as they have since the inception of the Internet, and Brazil has many reasons to become an excellent sandbox for the transformations to come, both in terms of technology as well as scalability.