Brazilian merchants accustomed to waiting months for credit card payments will soon be able to receive immediate cash through an initiative that sells and tokenizes debt in a $100 billion market for working capital-strapped merchants, giving buyers double-digit profits.
BlackOpal, an on-chain asset management and payments platform, announced that it will purchase bonds at a discount, tokenize them on the GemStone platform using the Plume Network blockchain, and sell them to institutional investors around the world. The platform will go live later Thursday.
The program focuses on expanding the use of tokenization in emerging markets, going beyond government bonds to unlock economic assets such as credit card receivables. Brazil already boasts a thriving real estate tokenization scene and central bank's DREX digital currency project, making it fertile ground for products like GemStone.
In Brazil, 70% of credit cards allow customers to pay in installments up to 12 months, delaying payments to merchants. GemStone uses this system to purchase receivables with fixed ownership in the Brazilian Central Bank C3 Registry at a discount. This transaction, known as a genuine sale, is a legal transaction in which the seller transfers all title, rights, risks, and rewards in the accounts receivable to the buyer.
Instead, merchants receive 95 cents on every dollar immediately, without having to wait months for credit card payments. The tokens will then be redeemed for full value once Visa or Mastercard automatically remits the full payment to BlackOpal instead of the original merchant. Investors profit from the spread by buying tokens cheap and cashing out at the list price.
“GemStone represents a fundamental rethinking of trust in emerging markets,” BlackOpal CEO Jason Dehni said in an announcement shared with CoinDesk. “We don't take on merchants. We don't take on credit risk. We buy receivables as true sales, settle them through Visa and Mastercard payment rails, and ownership is locked at the central bank level.”
“This structure is designed so that collection is a matter of “when,” not “if.” This is what institutional emerging market yields should look like,” Deni added.
Black Opal told CoinDesk that token buyers will be able to earn an annualized yield of 13% (US dollar denominated and currency hedged) with card issuers covering customer defaults. This compares to the 4.2% available on 10-year U.S. Treasury bills, a so-called risk-free rate globally, without the risks of high inflation, default, and currency fluctuations associated with investing in emerging market assets.
GemStone's launch is backed by a three-year, $200 million investment from Mars Capital Advisors, a Swiss company with $2 billion in advisory assets specializing in working capital solutions.
“Brazilian credit card receivables are a large, highly liquid asset class that is underserved by institutional capital. Gemstone changes that,” Rick Pearson, CEO of Mars Capital Advisors, said in a statement.
Draupnir Capital, an advisory firm specializing in the integration of institutional private credit and the Web3 economy, acted as the sole lead advisor and capital introduction partner on the transaction.
