Tanssi, a Brazilian fintech firm, is launching a government-supported blockchain project in São Paulo, offering microloans to farmers following a successful pilot of a local currency in Santo Antônio da Alegria.
At the Blockchain Conference Brasil in São Paulo, Tanssi’s Director of Business Development, Luis Dal Porto, shared that the microlending service will be introduced next month, with a mobile app already in operation.
Backed by the São Paulo city government, the project provides up to R$15,000 ($2,800) in quick loans to small-scale rural producers. The blockchain infrastructure, developed by Tanssi, enables the creation of dedicated blockchains, known as “appchains.”
While blockchain technology powers the service, it remains invisible to the end-users.
“The blockchain is seamlessly integrated into a mobile app provided to producers. Additionally, physical payment terminals are available,” explained Dal Porto. “This closed ecosystem ensures better control over credit usage and risk mitigation.”
Tanssi was chosen over public blockchains like Ethereum or Solana due to concerns about performance and cost. The team prioritized predictable transaction fees and reliability, features that are challenging to guarantee on public, permissionless networks plagued by congestion, fluctuating fees, and occasional downtime.
“Public blockchains often face bottlenecks and costly transactions. This lack of predictability is a major concern for our partners,” Dal Porto elaborated. “They need a stable environment to manage their capital without unexpected costs.”
Despite the central bank’s halt on the Drex digital currency deployment, backers of the project anticipate the growth of municipal and private blockchain initiatives in Brazil.
The Santo Antônio project, launched last year, utilizes a token system to distribute municipal aid, like food benefits, within a controlled ecosystem that restricts unauthorized spending. Tokens can be accessed via a mobile app or physical terminals, ensuring funds are used appropriately and not for unauthorized activities.
The São Paulo microloan initiative is scheduled to launch next month.