Giuliano Galoppo, a player from Argentinian mid-table club Banfield, has been acquired by Sao Paulo, one of Brazil’s top soccer teams. You must be thinking that this is quite natural.
It was a remarkable event since funds were transmitted in the stablecoin USD Coin (USDC) via the Bitso exchange in Latin America.
The fact that Sao Paulo tried out cryptocurrency for a transaction is no surprise. The club, one of the biggest in Brazil and owner of the storied Morumbi stadium, signed Bitso, the region’s first crypto unicorn, as a sponsor in January.
In the first half of 2022, Bitso processed $1 billion in crypto remittances between Mexico and the United States, a 400% increase over the same time in the previous year. By the end of December, it expects to have processed $1 billion more.
Why was USDC used?
According to Dante Disparte, the chief strategy officer of Circle, USDC was used in the transaction to stay away from currency-related risks. Circle is one of the companies behind USDC. However, it seems as though the Argentine club won’t be able to eliminate currency risks. According to BCRA sources, the club will have to convert the entire transaction’s value into Argentine pesos at the set exchange rate.
Moreover, the club will be prohibited from using the official exchange market to acquire players for 90 days as a result of having traded USDC.
Although the introduction of USDC sped up the transfer and was effective marketing, it did not address Banfield’s fundamental problem.