Brazilian fintech company Tanssi is rolling out a government-backed blockchain project that includes microloans for farmers in São Paulo, following a local currency pilot in the town of Santo Antonio da Alegría.
In an interview with CoinDesk at the Blockchain Conference Brazil in São Paulo, Luis Dal Porto, business development director at Tanssi, revealed that the microlending service will be launched next month and that a mobile application for it is already up and running.
The project is supported by the São Paulo City Government and will provide quick loans of up to 15,000 reais ($2,800) to small-scale local producers. The system runs on blockchain infrastructure built on Tanssi and allows developers to create their own blockchain, or “appchain.”
The service uses blockchain technology, but only on the backend.
“In reality, you don’t even see the blockchain. It’s a mobile app that they provide to producers. They also have physical payment machines,” Dal Porto told CoinDesk. “This is a completely closed ecosystem that they offer to give you more control over how your credits are used and reduce your risk.”
Dal Porto added that the fintech company behind the project chose Tansy over public blockchains such as Ethereum or Solana due to performance and cost concerns. Because public funds are involved, the team prioritized predictable transaction fees and reliability. These two things are difficult to guarantee in public, permissionless networks, which have historically experienced problems with congestion, volatile transaction fees, and even downtime.
“The typical problem with public blockchains is that there are moments when bottlenecks occur or more expensive transactions occur. This takes away something very important for blockchains: predictability,” Dal Porto explained. “Companies need to have the predictability of spending that particular amount of capital and not exceeding it. If they charge 5%, for example, if their fees go up or down, that’s an unpredictable cost for them.”
Brazil’s central bank has paused the full rollout of its digital currency Drex, but the project’s backers expect municipal and private blockchain efforts to continue to grow in parallel.
The Santo Antonio project was announced last year and uses a token system to distribute municipal aid such as food transfers through a closed ecosystem with restrictions on how and where funds can be spent. The token, accessed via a mobile app or physical payment terminal, is programmed to block purchases unrelated to the intent of aid, such as gambling on sports betting apps.
São Paulo’s microloan program is scheduled to start next month.
