Banco BTG Pactual SA, Latin America’s largest investment bank, are planning on releasing their own security token, named ReitBZ. The Brazil-based bank is aiming to raise $15 million through an initial coin offering (ICO). The bank will back the value of the token with distressed Brazilian real estate assets, investors will receive periodic profits based on real estate performance.
ReitBZ is the first security token backed by Brazilian real estate and managed by a large and established investment bank. Real estate in Brazil has had a difficult few years after a period of economic downturn but is reportedly now a “flourishing market” and the best time to invest in it is now. Research has shown that approximately 12,000 residences were sold in the city of Sao Paulo in the first half of 2018 – an increase in sales of 52% as against the first half of 2017 and is the best period for property sales since the country’s economic crisis began in 2013.
The token will enable the bank to offer its real estate business to global investors at reduced costs, something it was unable to do traditionally.
Roberto Sallouti, CEO and member of the Board of Directors of BTG Pactual, said: “The technology associated with this offering allows us to be a pioneer in providing access to asset classes that have historically been difficult for global retail investors to access. We are constantly exploring innovative ways to promote, democratize and encourage the development of financial and capital markets”.
Investors will be able to buy ReitBZ via a special platform by using the Gemini Dollar (GUSD) stablecoin or Ethereum (ETH). Investors will “receive periodical dividends from the recovery of the distressed assets, which will be handled by a BTG-owned company called Enforce”. The investments will not be hedged.
With the rise of cryptocurrency and blockchain technology, banks across the world are adapting and adopting. Japanese banking giant Mizuho Financial Group, will also launch its own digital currency service, a new cashless payment system, known as J-Coin Pay on March 1.You can read the ReitBZ white paper here.