is it worth it?

The year 2022 was not positive for cryptocurrencies. The main one, Bitcoin, has dropped about 60% in value since January. Despite this, Brazilian companies are betting on cryptocurrencies to retain customers, including in digital banking Nubank and the e-commerce giant Free market.

In Brazil, the cryptocurrency segment is growing, but is still a fraction of the size of the US visa. The revenue of the segment in the country is estimated at 489 million USD, which is an annual growth of 35%, while globally the segment is advancing by an average of 6.7%. On the American market, the movement is 18.5 billion dollars. Here, the average income per person is $64.66, which is less than half of the world average of $135, according to Statista consulting firm.

For Arthur Church, technology expert and book author Convenience is the name of the company, the main use of the company’s cryptocurrency is to create a “fan club,” that is, to establish or expand relationships with consumers to understand their spending patterns. The Church claims that although a bonus using cryptocurrency has a different value than money, stated in refund (money back), this can mean cost reduction for companies.

The latest announcement about cryptocurrency was made by Nubank, which created the so-called NuCoin. In the pilot project, the currency will be used timidly at first. “Nubank’s goal in developing its own cryptocurrency is to offer users benefits such as discounts and benefits as they accumulate NuCoins,” the company reports. That is: initially, the cryptocurrency will only be used to reward users of the company’s credit card and digital account.

Mercado Livre is another example of a company that has created its own cryptocurrency, also with the aim of offering this asset as a bonus on purchases in its e-commerce. The idea is that currency is a refund more modern.

The company’s approach to the coin market is clearer. Cryptocurrency, made in partnership with Argentina ripped, not only can it be used to pay for purchases on the company’s marketplace, but it can also be traded or even redeemed for reals through the Mercado Pago app. Mercado Coin starts at $0.10 and will then follow market price logic, varying according to supply and demand.

The use of digital currencies as rewards has already made inroads into benefits platforms. So much so that Dotz, founded in 2000, wants to have its own digital currency. According to Robert Chade, president of Dotz, the company, in addition to guaranteeing the exchange of products, has for almost a year been able to exchange accumulated points for third-party digital currencies. Now he’s already thinking about his own option: “We’re going to launch DotzCoin soon,” he says.

Fabio Santoro, director Brazilian Association of Companies in the Loyalty Market (ABEMF), says a good loyalty program helps avoid price wars. “A loyalty program aims to increase spending on a specific category, whether it’s a credit card, retail or airline, as well as increase the company’s presence in the customer’s life. It turns consumers into brand advocates, as it happens apple or Harley DavidsonSantoro says.

According to Ayron Ferreira, director of research at Titanium Asset, an asset manager specializing in cryptoassets, the creation of cryptocurrencies by companies is common, but many have failed and lost a lot of value after allowing the buying and selling of these assets outside their own systems.. “The difference with these cryptocurrencies is that they have big brands behind them This can give them legitimacy but they have to be useful. (clientele)“, he says.

A success story in Brazil

Startup Cloudwalk, from the accounts receivable forecasting market, has one of the most mature cryptocurrency projects among Brazilian companies. At the end of last year, the company announced BRLC, a cryptocurrency backed by the real.

According to Paul Perez, head of design at Cloudwalk, the company has already issued 35 million units of BRCL, the value of which is guaranteed by a trust fund of 1 BRL for each cryptocurrency. Currently, BRLC resides in more than 1.7 million digital wallets of Cloudwalk registered merchants worldwide. The company hopes that it can be a simpler and faster way for international transactions.

“With BRLC, thanks to the stablecoin, we are able to deliver new features to our customers every week,” says Perez. All transactions are recorded on the blockchain, a kind of digital and immutable ledger. In the long term, Cloudwalk plans to tenfold the number of transactions possible per second in BRLC, which is now 500, while still providing consumers with access to the cryptocurrency.

Examples abroad

The biggest example of a company trying to create a cryptocurrency was that of Facebook, which launched the Libra cryptocurrency, later renamed Diem. The company failed to garner the political and economic support needed to make the Diem a successful global dollar-backed currency. This was one of the biggest failures among the projects Mark Zuckerberg. Eventually, the business was sold to US bank Silvergate Capital, in a deal worth $182 million.

“In the case of Facebook, the project changed its scope several times and suffered a lot from the eyes of regulators, who were already monitoring the company’s operations on social networks,” says Luiz Ramalho, founder of Fingerprints DAO, an organization that invests in NFTs and partner responsible for crypto investments of the Canary and Giant Steps funds.

Another case of cryptocurrency that failed was with Kodak. In 2018, the company announced Kodak Coin as a currency for collecting royalties from photographers. As with Facebook, the company has failed to create value and acceptance for its digital assets. Today, the vast majority of references to the Kodak project have been deleted from the company’s website.

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