HACKING GROWTH

Stablecoins, RWA and ReFi

in Latin America
Introduction
America Latina is a great mix; generally speaking, the wealth of Latin
America remains in the unique flavors, colors, and shapes we
experiment with here due to our mixed roots. Our challenges, such
as inequality, inflation, unsustainable exploration of natural
resources, growing deforestation, loss of forests and rivers, political
instability, lack of financial interoperability, lack of access to capital,
racism, and sexism, are also mixed.

At the same time, there is no doubt about the enormous wealth in

Latin America, from commodities to sports, culture, and fintech
(even crypto, as countries such as Brazil, Argentina, and Venezuela
are global leaders regarding crypto adoption, not for good reasons
but not exclusively for bad reasons).

To explore the above, we decided to launch collaborative research,

starting with an Open Call for contributors to present proposals
regarding three topics in the intercession between Latin America
and Web3: Regenerative Finance, Real World Assets, and
Stablecoins.Before jumping into the content, thank you to all the
contributors joining us in this adventure.

Below, you can find links to their original documents with the full
research of each team:

Regenerative RWA in Latin Stablecoins

Finance in LatAm America in Brazil
Beyond its current scope, as Celo prepares to join the Superchain, we
can also expect that the Superchain will gain the expertise of a
blockchain protocol built under the Regenerative Finance goals.
Considering the current collection of features and the upcoming
expertise in Regenerative Finance from the Celo community, we
conducted research to understand the key areas where Public Goods
and Regenerative Finance can leverage their tooling to experience
mutual growth with Latin America.

The idea here is to provide a smooth but straightforward ride.

To learn about the researchers involved and their backgrounds, you,

the reader, can check this previous article: ReFi, RWA, and Stablecoins in
Latam: Research Grants: Know our Grantees.

Avante!
 CONTENT

2 5 8
INTRODUCTION ABUNDANCE OF WEALTH REGENERATIVE FINANCE
& IN LATAM
LACK OF CAPITAL

16
UNIQUE OPPORTUNITIES:

18
Real World Assets &
Stablecoins

REAL WORLD
ASSETS: size of
the market

22 STABLECOINS IN
BRAZIL

24 THE POTENTIAL
MARKET 28 IMPACT CAPITAL
ALLOCATION 29 THE RESEARCHERS
ABUNDANCE OF WEALTH
& LACK OF CAPITAL
 ABUNDANCE OF WEALTH &
LACK OF CAPITAL

While facing challenges related to poverty and inequality, Latin America is also the
source of minerals (13 of its countries are between the 15 largest suppliers of minerals in
the world), food (14% of the world food is produced here), medicine (40% of the
biodiversity of the world is here), and talent to the rest of the world.

At the same time, financial inclusion remains a challenge here as, according to the
Interamerican Development Bank, “27% of the population above 15 years old are
excluded from formal financial services, and only three in ten persons aged 15 and older
have obtained a loan with a financial-sector entity in the last year”.

This paradox, also present in Africa, has its roots in the consequences of colonialism
and racism. While it's foolish to forget the past, one cannot live in the past. The region is
always on the path of building its future, and now Web3 builders have come into play to
support this mission.

Understanding Latin America's key position in the global commodity market, foreign
investors rush to participate; as commodities play a decisive role in the wealth of LatAm
countries, governments face the dilemma of pursuing short-term commodity profits
and increasing dependence or trying to diversify, facing the risk of a poor commercial
balance.

But what if we could leverage the abundance of natural resources to foster innovation
and technological development? Before diving into the research, we believed in the
Web3 potential to leverage LatAm's current riches for the region to overcome its
challenges. Now that the study is done, we feel safe to affirm that the potential is not
only for LatAm to overcome its challenges but also for Web3 to address some of its
most pressing needs: liquidity, real use cases, and inclusion. But for that to happen, we
need better tools for impact capital allocation, the topic we address in the conclusion.
But first, let’s understand why we invited researchers to explore Stablecoins,
Tokenization of Real-World Assets, and Regenerative Finance.
 ABUNDANCE OF WEALTH &
LACK OF CAPITAL
As LatAm advances in Web3 adoption, leading the global trend (as highlighted in the
last report by Chainalysis), stablecoins become one of the most relevant topics as it
requires deep discussions about regulation and sovereignty.

According to a summary of data about stablecoins collected by Rise Works, stablecoins

alone are responsible for 75% of all crypto transactions in DeFi, and the volume of
transactions grows by 50% every year. One can even link this relevance and fast growth
to the race for CBDCs (Central Bank Digital Currencies) and digital versions of fiduciary
money in the world, and also in Latin America, as we can see clearly in the example of
Brazil’s CBDC, the DREX.

If stablecoins are the backbone of crypto transactions, then Real World Assets (RWA)
can be considered the hope the industry has for abundant liquidity in the future. We can
even say that a macro crypto economy to exist it depends heavily on the capacity of
the industry to onboard assets born outside the crypto industry. In this specific
background, considering LatAm's rich commodities market, there is a huge potential for
mutual growth between Web3 and LatAm countries.

But solving liquidity alone won't take us where we want to be because wealth alone
won't solve the challenges related to biodiversity loss, inequality, and violence. In this
background, we also tackled the topic of Regenerative Finance (ReFi) in Latin America.
ReFi can be described as the meeting between Decentralized Finance, Climate Action,
and Social Justice; we can say those topics are especially relevant in Latin America
because, as told before, the region holds 40% of all biodiversity on the planet, and right
now, we (the world) risk losing this biodiversity as LatAm loses forests and fertile lands
as they get destroyed by mining operations or get desertified to provide space for soy
and cattle agribusiness.
REGENERATIVE FINANCE

The topic of Sustainable Finance is not new to Latin America. As the countries have been
facing the challenges of the Metacrisis since colonial times, it's usual for them to
experiment with strategies for resilience. But the challenges seem to increase yearly, and
as they’re mixed (Politics, Economy, State x Civil Society affairs, etc.), it's imperative to
consider leveraging blockchain technology and the Web3 culture to face those
challenges.

However, it's inefficient to experiment without understanding the territory, and currently,
as there are no complete maps of the Regenerative Finance ecosystem in LatAm,
investors and builders struggle to locate themselves and allocate energy, time, and
capital. ReFi can be understood in different ways; we will present three different ones.

1. John Fullerton is the leading name behind the Regenerative

Economy slogan in the contemporary finance ecosystem. As a
Venture Capital manager, he came from traditional finance,
leveraging its tools to foster a regenerative economy, by
implementing good practices regarding impact capital
allocation, he settled some of the principles through which
finance can meet climate action (in all its business forms) for
mutual benefit.

The principles comprehend the (1) complexity of climate action, (2) the need to
understand wealth holistically, (3) the urgent need for solutions that are adaptive and
responsive, (4) empowered participation, (5) the need to respect and acknowledge the
inherited authority of local communities, (6) the focus on intersectionality and
interoperability of different systems, (7) volume of capital, and (8) dynamic equilibrium
of competing forces within systems.
REGENERATIVE FINANCE

2. Before John Fullerton and finance and tech people

addressed the need to build harmony with nature, the Chilean
biologist Humberto Maturama was the one (on the science
side) teaching us that nature has its own regenerative
mechanisms from which we can learn. Although his work is
vast, the concept of autopoiesis has changed the way
humanity sees nature, from a passive agent receiving the
impact from humans to an intelligent ecosystem of
regenerative tools coordinating to protect life in general.

The concept of autopoiesis is key to defying Francis Bacon's dominating approach.

Bacon argued that nature needed to be addressed as a “which” in the Inquisition, a
which humans would lock and inquire without any mutual respect as nature is
considered inferior to humans. Maturama, on the other side, has shown that nature is
not something we deal with but something that we’re part of, something older, more
intelligent, and powerful.

3. While Fullerton and Maturama launched the basis for

Regenerative Finance to come to existence, the concept people
deal with today within the Web3 ecosystem has its features, as
it includes blockchain and the perception that we also need
new forms of money to emerge if we want a regenerative future
to exist.

Within Web3, a Google search shows that the first article trying
to explain Regenerative Finance was published on January 19,
2022, by the time people addressing sustainability within Web3
were busy between trying to make sense of this ecosystem,
building this ecosystem, and communicating this ecosystem.

The excellent outcome of the collection of events that happened until the start of 2022
led a group of young adults (who later became the co-founders of ReFi Spring) to
consider creating a structure to accelerate the discussion about ReFi and bring in new
voices from local communities addressing the climate tragedy in the global south.
REGENERATIVE FINANCE

The article mentioned was originally published in the Brazilian EdTech Prensa; it was
translated into English and published again on January 25, 2022. By the time the ReFi
ecosystem was taking its first steps outside the niche of nerds playing with Blockchain,
Carbon Markets, and Governance. KlimaDAO was already a reality, and ReFi Spring
(now ReFi Events) and ReFiDAO were taking form.

The article that settled the first definition of ReFi for that group identified Regenerative
Finance as the attempt to bridge the gap between Web3 and Regeneration, following
Fullerton’s principles to understand the best tooling for this endeavor.

While ReFi can have multiple perspectives, it is important to highlight that ReFi is not the
same thing as ESG or Green Capitalism; ReFi aims to bring the full capacity and global
approach of Web3 to the regeneration field as the current key stakeholders of this
ecosystem understand that sustainability is not enough anymore.

Now that we understand ReFi from different perspectives, let's attempt to address it in
Latin America.
REFI IN LATIN AMERICA

In this context, the scope of this research was to identify and test the best tools and
methodology to map ReFi in Latin America and try to find ways to address: the map of
the influence of ReFi, the best dashboard to integrate this map, the . The research was
conducted by the ReFi OGs Philipp Teles von Hauenschild, and Pedro Parrachia (first
introduced here) with the help of Marcelo Silva. In this part of the article, we present the
key findings.

The challenge of mapping impact initiatives is the development of the challenge of

naming impact. As non-profit and impact startups struggle to find capital, the lack of a
global unified taxonomy for impact increases the size of the challenge of finding them
and measuring their impact.

The paradox is that the more complexity an MRV framework has, the more interesting it
will be for capital allocators as it will comprehend more details about the impact claims.
Still, fewer impact initiatives will be able to access and use it (mainly because the
financial language capital allocators speak is not the same as impact suppliers
understand). Conversely, less complexity means lots of impact suppliers will use it and
create substantial impact databases. Still, the cost of capital allocation will be higher
since verifying the impact will demand close attention to prevent fraud.

But this challenge doesn’t change the fact that investors keep searching for new ways
to allocate capital in the region; according to research by the Global Impact Investing
Network, the allocation of impact capital in LatAm has grown at an annualized rate of
21% in the last five years.
REFI IN LATIN AMERICA

Also, according to an article by Impact Alpha “Nearly 300 funds now target the region,
including 89 funds with $6 billion in assets that have an exclusive focus on Latin
America and the Caribbean”. The same article highlighted the fact that Brazil alone has
set a National Impact Economy Strategy, aiming at funneling $120 billion USD over the
next ten years.

Of course, as highlighted by the ReFi thesis about the need for transparency and
efficiency in the traditional ESG market, the main challenge is efficient capital allocation;
the consequence for Latam founders is a lack of capital.

The research concluded that the second approach would fit a highly complex
ecosystem that faces challenges such as a lack of legal interoperability, regional
coordination tools for non-profits and capital allocators, and direct access to capital
since it usually comes from elsewhere. The challenge of mapping an ecosystem
operating so close to innovation is hard as the ecosystem is shaping not only the
surrounding environment but also itself, to the point where it is hard to tell what is from
within or outside.

Regarding Regenerative Finance, the challenge is that the climate action ecosystem
surrounding ReFi can be indistinguishable from ReFi.

So, we can start our map through the self-proclaimed ReFi Communities in the region,
namely:

ReFi Colombia, ReFi Latam, ReFi Mendellín, ReFi Atlántico, ReFi Saravena, ReFi
Venezuela, ReFi Paramaribo, ReFi Costa Rica, ReFi México, ReFi Argentina, and ReFi
Brasil.

Those communities were created after ReFi Spring initial support for the first ReFi event
in each country and then upgraded to ReFi DAO Local Nodes after they joined one of the
cohorts.
REFI IN LATIN AMERICA

As the Regenerative Finance movement is not held by State or political boundaries,

Susan’s work can definitely help us understand its place in Latin America. The region is
glued not only by the agreements between the States but also by the shared past of
colonization and the several pré-colonial cultural exchanges that indigenous people
had (e.g few people know that the Amazon forest is the result of human action, the
forest was planted by indigenous people thousands of years ago).

Another point that prevents one from understanding the

whole of ReFi in LatAm with a State-level-tunnel vision is
the decentralized feature of ReFi initiatives, and a third
aspect that allows us to affirm this is the fact that while
States and companies race each other for the financial
profits of the ESG market, for Indigenous people (and
cities built by black people fleeing slavery in Brazil
(Quilombos) as well), often the real profit is the forest
alive, providing food, shelter, and spiritual guidance.

The first key finding of the research is that, due to its

complexity, the mapping of the ReFi ecosystem in LatAm
should address a holistic perspective when trying to
understand its potential.

However, considering ReFi's market approach (as it tries to design new market
incentives to foster regeneration), we need to narrow the scope to understand
specific aspects, and today, those are related to the potential links between
regeneration, business ecosystems, market incentives, and policymaker
engagement.

To understand the fintech aspect of the ReFi ecosystem, more precise lenses are
needed, and that's when Susan Strange’s work comes into play.
REFI IN LATIN AMERICA

Observing LatAm through the lens of potential adoption by companies in the

sustainability field, Phillip and Pedro developed a Nexus Matrix to identify how different
types of mission-driven businesses approach blockchain technology. This will allow us
to create more targeted strategies to promote the adoption of blockchain platforms like
Celo in the sustainability field.

Applying Strange’s thesis can serve not only the understanding of the potential of
adoption but also the position of Celo (as well as the other partners of the Superchain)
within the already in-place sustainability market in Latin America, according to the
authors:

“Moreover, translating Susan Strange’s contribution to International Political Economy

adds to the effort of generating new knowledge through new perspectives on Celo’s
positioning in relation to the environmental impact projects in Latin America as a model
of assessment to be followed.”

The researchers selected some of the most well-known ReFi startups and initiatives in
LatAm (namely: Ekonavi, EBCF, Sotero Ambiental, Sinba, Positiva.eco, Duoplastic, Nossa
Terra Firme, DeTrash, SAP, Ambipar, Allcot) to use as examples of how to cross different
data to find the potential that a specific field has to adopt Blockchain and Celo.
However, by the end of this doc, there is an addendum with a list of 80 ReFi initiatives
with activities in Latin America.

According to the matrix built out of the examples, consultancy and service businesses
with regional reach have an easier path to adopt blockchain, while manufacturing
companies will struggle.

Some of the key findings of the research are:

REFI IN LATIN AMERICA

1. Businesses operating in consultancy and service-based models, particularly those

with a regional reach, demonstrated a higher propensity towards blockchain
adoption, including Celo. This can be attributed to the flexibility and adaptability of
these business models, which align well with the innovative nature of blockchain
technology.
2. In contrast, manufacturing businesses, especially those with a larger scale, faced
challenges in adopting blockchain. The more established and structured nature of
manufacturing processes can create barriers to the integration of new technologies
like blockchain.
3. While size and reach can influence blockchain adoption, the impact is more
nuanced. Larger corporations may possess the resources to invest in blockchain
technology, but existing systems and regulations may also constrain them. On the
other hand, smaller businesses may be more agile and open to innovation, but they
may lack the resources to implement blockchain solutions.
4. Enhanced Interoperability: This initial example of the analysis corroborates with the
strategic stance of Celo prioritizing interoperability with other blockchains (as the
onboarding to the Superchain) and existing business systems and technologies to
lower the barriers of adoption.

By adapting Fullerton’s regenerative principles, embracing Maturama’s vision of nature

as an interconnected ecosystem, and utilizing the adaptability of Web3 technologies,
ReFi can empower local communities and foster sustainable development in Latin
America. However, as ReFi places itself in a gap, as a bridge, its map should consider not
only the rope in the gap, but also its borders, highlighting the potential for each sector to
onboard new sustainability initiatives to ReFi.
REFI IN LATIN AMERICA

To stratify the database, however, one would need to apply Strange’s tooling so the data
would not only be cold information but a mechanism to identify the low-ranging fruits
as well as the distance between ReFi and ESG.

While promising, our findings underscore that ReFi adoption encounters significant
barriers in Latin America, such as fragmented regulatory environments, limited legal
interoperability, and inconsistent access to funding. Nonetheless, the presence of self-
proclaimed ReFi communities across the region demonstrates this act-local-
coordinate-global approach of the community.

Looking ahead, the next sections will delve into how Real World Assets (RWA) and
Stablecoins can complement the ReFi landscape, providing liquidity and stability and
further expanding capital access across Latin America. These tools can bridge the gaps
left by traditional finance and enable ReFi to thrive.
THE UNIQUE OPPORTUNITIES OF
LATIN AMERICA
As mentioned in the introduction, Latin America’s challenges are just fit for its
opportunities. Due to the natural riches and the mix of cultures in the region, there
are ways to unlock liquidity and reduce the costs and complexity of our markets'
interoperability (generally speaking) here.
The first is our rich commodities market and the Real World Assets opportunities for
crypto, and the second is the connection between stablecoins and the non-web3
sympathizers here.

Real World Assets (RWA) in Latin America

The research conducted by the Kairos team, with the support of Verber Souza
(ReFaz), addressed the State of the Art of RWA tokenization in Latin America. This
research explored the different stages of regulation and market development in the
region, analyzing key aspects of each country that have officially addressed the
discussion.

The concept of Real World Assets (RWA) revolves around the digital representation
of physical assets through tokenization, enabling these assets to be integrated into
decentralized finance (DeFi) ecosystems. This technology allows various types of
assets—ranging from financial instruments like stocks and bonds to tangible goods
such as real estate, natural resources, and industrial infrastructure—to be
transformed into digital tokens recorded on a blockchain. This process facilitates
fractional ownership, increases liquidity, and enhances transparency through on-
chain records.

As said before, Latin America, with its abundant resources and dynamic markets, is
positioned as a key region for the tokenization of RWAs. As the region faces
persistent economic challenges, such as inflation, currency instability, and financial
exclusion, tokenizing RWAs could democratize access to investment opportunities,
traditionally available only to institutional players, by reducing barriers and offering
retail investors the chance to participate in various asset classes.
REAL WORLD ASSETS IN
LATIN AMERICA

Latin America’s economic landscape includes several sectors that stand to benefit
significantly from the tokenization of assets:

1. Financial Services: In this sector, traditional instruments such as stocks, bonds,

and debt can be tokenized to facilitate access, improve liquidity, and reduce
transaction costs. Projects like Polytrade and Num Finance are at the forefront,
integrating real-world financial assets into blockchain ecosystems.
2. Industrial Sector: Tokenizing industrial assets, such as machinery and production
units, enables investors to own fractions of these assets. This not only decentralizes
investment but also introduces transparency and traceability to the management of
such infrastructure. Projects like Dual Mint and Dimitra are developing solutions to
bring these possibilities to the Latin American market.
3. Energy Sector: As Latin America transitions toward renewable energy, the
tokenization of clean energy units presents a unique opportunity. Platforms like
Unergy are already providing tokenized solar energy investment options that allow
retail investors to participate in sustainable projects.
4. Real Estate: Traditionally inaccessible for many due to high entry costs, real estate
tokenization now allows smaller investors to acquire fractions of properties. Initiatives
like Rental and Netspaces are making global property investment more secure and
efficient.
REAL WORLD ASSETS IN
LATIN AMERICA

But what about Natural Assets?

Interestingly, while LatAm excels in the commodity market, Kairo’s research found
that this is not one of the main fields of tokenization. But why? Without diving too
deep into the topic, we can say that LatAm’s dependence on commodities is a topic
addressed not only locally (within each country) or regionally but also globally.

When commodity prices are down, LatAm feels it first, but the answer of the
countries in the region challenges the global economy's capacity for coordination,
as the countries (just like its pairs) need to apply control mechanisms such as
reducing production or increasing export costs. And when it happens, prices spike
again. While it's a regular market activity, countries with less capacity to hold
reserves suffer to feed their population.

If we all agree that no harmony is a desired standard for markets related to primary
goods, it's essential to balance this situation.

What happens is that while countries invest in diversifying their economy, the main
struggle they face is regional coordination, as alone countries will face the paradox
of needing commodities to balance their export-import balance or having too much
money from commodities and becoming unable to say no to it. As the World
Economic Forum highlights in the article “How can Latin America overcome its
dependence on commodities?”:

Diversification is also harder in boom times, yet this is exactly when decision-
makers should embrace targeted investments to soften the impact during busts,
making sure those investments are converted into productive platforms for growth.

But what does this have to do with the absence of the tokenization of natural assets
in the four most tokenized sectors of the economy?
REAL WORLD ASSETS IN
LATIN AMERICA

While commodities are the backbone of the regional economy, growth remains
pressured in other sectors, such as Finance, Industry, Energy, and Real Estate. But
this doesn’t mean that the natural assets will stay outside the tokenization trend for
long as governments can see it as an opportunity to improve their planning
capabilities tokenization seems like a point of non-return.

Despite these promising developments, regulatory challenges remain a significant

hurdle. Latin American countries are at different stages of regulatory maturity
regarding tokenized assets; let’s see some cases:

• Brazil: One of the most advanced in the region, Brazil has introduced specific laws
such as the Legal Framework for Cryptoassets (Lei 14.478/2022), which governs virtual
assets. The country’s efforts to tokenize government assets, such as national heritage,
demonstrate its commitment to integrating blockchain in the public sector.

• Argentina: In contrast, Argentina lacks a unified regulatory framework but has

leveraged existing laws on digital signatures and trusts to navigate the space. The
country’s fintech sector is actively pushing for regulatory sandboxes to test tokenized
solutions within a controlled environment.

• Colombia and Mexico: Both countries have launched regulatory sandboxes for
blockchain applications. However, while Colombia explores debt tokenization and
financial inclusion initiatives, Mexico’s central bank remains conservative regarding
the use of crypto assets as financial tools, indicating a slower path toward
comprehensive regulation.
REAL WORLD ASSETS IN
LATIN AMERICA

The Size of the Market

The tokenization of RWAs in Latin America is projected to reach unprecedented

levels. According to estimates by BCG & ADDX, the market could reach up to $10
trillion, with 5-10% of all global assets expected to be tokenized by 2030.

This significant growth potential is accompanied by challenges, such as the need for
interoperability between platforms and legal frameworks across countries, secure
Oracle integration, and standardization in the tokenization process.

Due to the size of this market and its already key position in Latin America, the
tokenization of RWA’s can be seen as an opportunity to unlock local capital, hence
reducing the need for foreign capital to be allocated in impact.

But in order for that to happen, the interoperability of markets and financial
ecosystems in LatAm needs to be addressed, either by the countries or by new
solutions created by the civil society to bypass the current complexity.
And that’s when the role of stablecoins comes into play.
STABLECOINS IN
BRAZIL
STABLECOINS IN
LATIN AMERICA

The growth of stablecoins in Latin America offers an alternative to volatile local

currencies, providing stability for transactions and savings. For countries facing
hyperinflation like Argentina and Venezuela, stablecoins offer a way for citizens to
store value and conduct transactions without the fear of devaluation.

This accessibility increases financial inclusion by enabling the unbanked

population to participate in the digital economy through mobile wallets and
blockchain-based applications, often more accessible than traditional banking
services.

In Brazil, regulatory efforts such as the Central Bank’s push for a CBDC (DREX)
indicate an openness to integrating stablecoins and other digital assets into the
financial system.

With these regulations, investors and end-users will have legal clarity and trust in
the stability and security of transactions, leading to wider adoption. However, for it
to become a reality, we need one of two:

(1) regional coordination to reach a consensus, within the windows of time of the
opportunity, about the interoperability of its markets or (2) solutions that allow
capital allocators to transit between the markets seamlessly, with automated
compliance and reduced complexity.

While conducting the research, the team found information that can help us
understand the key aspects of the potential of the stablecoins market in Brazil.
STABLECOINS IN BRASIL

The potential market for stablecoins in Brazil

In 2023, the Brazilian stablecoin market moved an estimated $7.8Bi. While this can
be considered a big number, there is evidence of a broader opportunity for
stablecoins in Brazil.

Let's consider three examples in the narrow scope of unbanked populations,

sustainable farming, and international remittances.

But first, we need to understand why Brazil.

In Latin America, Brazil is a complex country.

While it is the 9th largest economy in the world, holds 12% of all surface water on
the planet, and feeds 10% of world’s population, the country also has the second
most digitized government in the world. But that's one side of Brazil, a side that is
not enjoyed by most Brazilians.

Most Brazilians spend their life dealing with another reality, almost another country.
This other country let’s call it Brasil, is the 8th most unequal country in the world,
and despite having the world’s largest tropical rainforest, the largest portion of the
Amazon rainforest, the country lost 30.7 million hectares of forest to deforestation
in the last two decades, most of it to the agribusiness to export cattle, soy, and
other commodities.

In Brazil, the high rates of violence (from both criminals and the police) against
poor people, women, Indigenous and black people (the vast majority of Brazilians)
increase the risk of living there and therefore increase the cost for underprivileged
populations to overcome poverty and its hardships.

While the country has been a solid democracy since 1988 and has a very regulated
media market, only four TV networks hold 70% of the national audience.

The complexity of Brazil, the mix of challenges and opportunities creates the
perfect example to highlight how stablecoins can address problems found
anywhere in the world.
STABLECOINS IN
LATIN AMERICA
Three potential use cases for stablecoins in Brazil

Brazil has 4.6 million unbanked people, and due to the lack of interest from private
institutions, the reduction of this number depends heavily on the government.
From the 4.6 million unbanked, 86% of the unbanked population in Brazil lives in the
northeast region, and most of them are women, and informal workers (mostly in rural
areas). As the government and the Central Bank rush to launch the Brazilian EVM - CBDC,
only in the northeast region, there is the opportunity for web3 to introduce wallets that can
be used without bureaucracy and linked with the CBDC (the DREX) in order to onboard 3.9
million people.

Still, in rural areas, while agribusiness thrives with government incentives and global reach,
smallholder farmers struggle to keep providing 70% of the food that goes to Brazilians'
homes. Sometimes, they lack access to credit, but they are responsible for more than 3.8
million farms from the total of almost 5 million that Brazil has.

For them, credit is a luxury, and as they’re too far from urban areas, sometimes they have
never visited a bank and will go through their whole life without entering one. But what if a
credit provider can map them, stratify their capacity, and rank their credit score to unlock
microloans? As most of them are using (not for option) sustainable practices, their credit
score could consider them as suppliers of impact data, that can be turned into financial
assets for international buyers.

Moving from rural areas to the cities, Brazil welcomes refugees from all over the world due
to national policies and a highly mixed population. They mix into the crowds, and once the
language is learned, it's hard to tell the difference; some would argue that there is no
difference as the country is an immigrant country by nature. This situation tends to increase
as the meta-crisis moves forward, turning several places in the world inhabitable due to the
scarcity of natural resources caused by human conflict.
STABLECOINS IN
LATIN AMERICA
Three potential use cases for stablecoins in Brazil

As they come into the country and integrate into the economy, starting to generate wealth,
they often need to send money to support their families abroad. In 2024 alone, they moved
$200m, usually facing the high fees of traditional remittance systems or using informal
services that don’t provide any safety.

Yearly, it is expected that 653k of them together will move $13mi USD through traditional
remittance systems. Here lies an opportunity for stablecoin issuers to provide an alternative
system with lower costs, radical safety, and transparency.
Why are those opportunities not yet taken up by traditional institutions?

Capital allocation still has a high cost due to several different factors, but within Web3,
there are already some experiments to improve this process.
While ranking in the 9th position on the Global Adoption Index, Brazil received over USD 90.3
billion worth of crypto inflow from July 2022 to July 2024, and stablecoins are responsible
for 70% of the transactions happening here. Let’s take a look at the Brazilian stablecoins:

BRZ Token—Created by the Brazilian Transfero Swiss Ag, the BRZ has its peg to the Brazilian
Real secured by the Reserve Managers, a group of individuals in charge of buying and
selling the token to keep its peg.

Current Price: $0.17 USD (1 Brazilian Real compared to the US Dollar)

Total Supply: 1Bi
Current Supply of Tokens: 200,009,990.20
Holders: 644
Market Cap: $35,245,960.48
Volume x Market Cap (24h): 0,1865%
STABLECOINS IN
LATIN AMERICA
BRL1 Token: With the promise to be launched in Q4 2024 by a consortium of key players of
the Brazilian web3 ecosystem (Mercado Bitcoin, Foxbit, Bitso, and Cainvest (Cayman
Islands)), with the tech features provided by Fireblocks.

cReal Token: Introduced on January 2022, to have its peg kept by an algorithm, the launch
of the over-collateralized stablecoin was led by Mila Rioja (at the time LatAm Lead of Celo
Foundation), who in Q1 2022 believed that stablecoins would be the front run of crypto
adoption and that a decentralized stablecoin (different from its centralized pairs) pegged
to the Brazilian Real would not be considered a competitor to the future Brazilian CBDC.

Current Price: $0.17 USD (1 Brazilian Real compared to the US Dollar)

Volume (24hrs): R$ 4.468.468,41
Total Supply: 4,470,663.605
Holders: 65392
Market Cap: $773,935 USD
Volume x Market Cap (24h): 4111080,90%

Considering the two already launched stablecoins pegged to the Brazilian Real, we have an
estimated MarketCap of ~ USD 36 million, which can be compared to the previously
discussed size of the stablecoins market in Brazil to highlight a huge open field for growth.
But for this growth to be sustainable, it needs to address the challenges faced by Brazilians
and, most importantly, respect the country's sovereignty, as the Central Bank already
started to provide insights about regulating this market.

Considering the current size of the stablecoin market in Brazil and the readiness of the
Brazilian Central Bank to launch its CBDC and regulate this market, we have to consider not
only the opportunities for the USD-pegged stablecoins but also local experimentalism
within ethical and legal boundaries.
IMPACT CAPITAL
ALLOCATION

The rise of decentralized finance (DeFi), decentralized autonomous organizations (DAOs),

and regenerative finance (ReFi) initiatives gives us a glimpse of how blockchain is being
utilized to create new pathways for capital allocation.

Despite its youth, the blockchain sector has already attracted significant investments. This
shift towards decentralized funding mechanisms highlights the potential of blockchain to
address the challenge of impact capital allocation we presented before. However, the
blockchain space, while growing, remains fragmented and niche, with a significant portion
of capital flowing through platforms primarily known to tech-savvy and crypto-enthusiastic
audiences.

Generally speaking, the research conducted by the three teams and coordinated by
Celatam led us to learn that the scarcity of capital in Latin America relates to two main
challenges:

1. The challenge of translating wealth into capital.

2. The challenge of capital allocation.

While tokenization tends to accelerate the overcoming of the first challenge, the second
one is much more complex since it brings together other challenges related to limitations
from traditional finance and Web3 economics.

In the last few years, Web3 has developed some of the most exciting mechanisms for
impact capital allocation. Things like Quadratic Funding and Retro Funding can be
considered revolutionary. However, the need for interoperability with traditional
mechanisms for compliance and the complexity of the solutions has delayed the time for
those mechanisms to reach the masses.

Conversely, conventional mechanisms for impact capital allocation have shown major
challenges such as lack of measurement, verification, and reporting technologies,
centralization of resources, and false claims of sustainability, representing almost half of all
the claims of sustainability available
Blended Finance & DeFi

How do we address this challenge?

After one year of exploration, sense-making (with TradFi and Web3 players), and research,
we concluded that Blended Finance has the potential to be one side of the bridge between
Web3 and traditional impact capital allocation mechanisms. The other side of this bridge
would be the Web3 mechanisms.

The basic idea is to bring Blended Finance to Web3, and Web3 to Blended Finance, and we
believe that we can do that in a single platform.

Merging these sources mobilizes funding for sectors like clean energy, education, and
infrastructure, which are often overlooked due to perceived risks or low returns.
Blockchain brings transparency, programmability, and interoperability to the table. E.g.
Smart contracts can automate compliance and reporting, ensuring funds are used as
intended while reducing administrative costs, and on-chain registries provide immutable
records of transactions, improving transparency and accountability across stakeholders.
Also, tokenization enables fractional ownership, allowing smaller investors to participate in
projects that previously required significant capital. This democratizes investment,
increasing both liquidity and accessibility.

BlendedFi is our answer to the diverse and dynamic challenges faced in Latin America’s
impact capital allocation landscape. After two months of research on the Latin American
Web3 landscape through the perspectives of Regenerative Finance, stablecoins, and Real-
World Assets, we understood that answers to the challenges we face as a region are linked
with two main aspects of finance: unlocking value and implementing interoperability for the
markets in the region.

From regulatory complexities and fragmented ecosystems to the lack of transparency and
accountability, these issues hinder the flow of capital to impactful initiatives. The integration
we envision not only automates compliance but also enhances the traceability of funds,
ensuring that resources reach where they are needed most. It provides trust for both
funders and impact suppliers.
BlendedFi

With BlendedFi, we aim to unlock liquidity for supply providers, democratize investment, and
build a resilient, impact capital allocation ecosystem tailored for Latin America and scalable
globally.

Latin America, with its diverse resources, rich culture, and mixed economic landscapes, offers
the perfect environment for pioneering such a system. The region’s combination of high crypto
adoption, financial inequality, and a growing focus on sustainability presents a unique
opportunity to create solutions that have both local and global relevance.

Through BlendedFi, we aim to bring together various stakeholders, from smallholder farmers
and tech innovators to commercial banks and multilateral organizations. This collaborative
ecosystem will support these groups to operate within a unified, transparent, and efficient
system that aligns with global best practices.

However, we cannot address these challenges alone; collaboration with regulatory bodies,
financial institutions, impact investors, and local communities is essential. By forming strategic
alliances, we will ensure that the platform remains compliant, secure, and adaptable to the
evolving legal and financial landscapes across regions.

With the right partnerships, a solid tech stack, and committed impact suppliers, BlendedFi is
not just a solution for Latin America; it’s a model for the world. We believe that with
collaborative effort and innovative thinking, we can unlock the true potential of impact capital,
transforming lives and economies across the globe.
 Marcelo Silva
Researcher Lead

Camila Rioja
Reviwer

Susanne Zarpellon
Reviewer

Kairos Research
Ariellus - Founder
Verber Souza - ReFaz

DeTrash
Philipp Von Hauesnchild

Floristic
Pedro Parrachia

BambaLabs
Rodrigo Paiva

RESEARCHERS
 CONTACT US

Forum
REFI IN LATIN AMERICA
1. Celo Foundation 34. Sinba Peru
2. Moss.Earth 35. Veritree
3. Impacta 36. Econavi
4. Toucan Protocol 37. Evercity
5. ReFi DAO 38. WePower
6. EcoSattva 39. Althelia Ecosphere
7. BitGreen 40. Blockchain for Climate
8. Biodiversity Network 41. Trees for the Future
9. Regen Network 42. NetZero
10. Ecotierra 43. ReFi Spring
11. CarbonChain 44. Bext360
12. Plastic Bank 45. ReBalance Earth
13. Giveth 46. Circularise
14. OroVerde 47. Veridium
15. dClimate 48. Crowther Lab
16. Common Forest 49. Land Life Company
17. KlimaDAO 50. Blue Token
18. ReSource Finance 51. Blockchain Triangle
19. Positiva.eco 52. PlanetWatch
20. OurForest 53. DeTrash
21. Energy Web 54. TruePrice
22. Rainforest Foundation US 55. Smart Forest
23. Netspaces 56. Proof of Impact
24. Dual Mint 57. Power Ledger
25. Blue Carbon 58. TerraPool
26. Helium Network 59. DAO IPCI
27. Green Digital Asset 60. Net0
28. Green Protocol 61. Plastic Disclosure Project
29. Agriledger 62. WildChain
30. Sotero Ambiental 63. Ecomatcher
31. SAP - 64. Greenstand
32. Ambipar Group 65. Carbon Markets Exchange
33. Allcot 66. Green Asset Wallet
67. ReFi Colombia 74. SavePlanetEarth
68. ReFi Latam 75. Dual Mint
69. EthicHub 76. Planetary Blockchain
70. GreenWorld Fintech 77. Eco Matcher
71. Worldcoin 78. ImpactMarket
72. Wren 79. Demeter
73. Earth Wallet 80. GoodDollar