This Brazilian digital bank wants to change the world, one block at a time

Word on the Block | Forkast.News

It may have taken a global pandemic to do it, but millions of unbanked people in Latin America have been propelled into the financial system since the beginning of the Covid-19 crisis.

Some 17% of the region’s unbanked population had gained access to the system by autumn last year as, within a matter of months, pandemic-related subsidies made financial inclusion a necessity.

Nevertheless, in Brazil, 34 million adults — almost one in six Brazilians — remain unbanked, according to São Paulo-based research firm Instituto Locomotiva. Those without access to basic financial services like savings accounts, credit and loans are disproportionately women.

“Many of the wallets and the banking records are in the name of the husband,” Taynaah Reis, chief executive of blockchain-powered neobank Moeda Seeds, told Forkast.News in a video interview. “This becomes a problem when [women] look for credit.”

Fortunately for Reis — who says that even she had limited access to information and credit, despite the benefits of privilege and a private school education — she was able to raise capital for Moeda Seeds through a US$20 million initial coin offering.

Being in blockchain has given Reis the opportunity to see the technology’s promise to democratize access to capital. But the sector has attracted its fair share of criticism, from worries over the speculation rife in crypto to concerns about the carbon footprint of such an energy-intensive industry.

Yet Reis says there are also ways for the industry to promote and foster environmental and social sustainability.

“Now, we have the COP26 (United Nations Climate Change Conference), and many discussions on climate change to hold every country accountable and every individual accountable, as well,” she said. “We see opportunities to create different economic models and assets that are sustainable over time.”

Moeda Seeds has itself created one such model, entering into a partnership with Brazilian forestry manager 3Agro on a non-fungible token project. The scheme allows buyers of the tokens not only to support the planting of açaí trees in the Amazon region through their investment, but also to gain exposure to revenue generated by the sale of the berries from the trees that are grown as a result.

With this kind of creative thinking, Reis says, blockchain-based finance can unleash forces for increased prosperity, social inclusion, environmental responsibility and the greater good.