São Paulo Selects Private Blockchain to Ensure Stable and Transparent Microloans

São Paulo Unveils Blockchain-Powered Microloan Program for Rural Producers

São Paulo is set to introduce a new microloan initiative designed specifically for small-scale rural producers, leveraging blockchain technology to simplify and secure access to credit. Developed by the Brazilian fintech company Tanssi, this program will launch next month and provide loans of up to R$15,000 (approximately $2,800) through both a mobile application and physical payment terminals. The blockchain operates seamlessly in the background, ensuring transparency and reducing risk throughout the lending process.

Unlike public blockchains such as Ethereum or Solana, which can suffer from fluctuating fees and network slowdowns, Tanssi’s proprietary blockchain was chosen to deliver consistent costs and reliable performance. This closed ecosystem allows for precise tracking of how funds are used, enhancing accountability and minimizing misuse.

Building on Local Success

This new effort expands on a successful 2024 pilot in Santo Antônio da Alegria, where a token-based local currency was used to distribute municipal aid like food benefits within a controlled environment. That system restricted spending to essential categories, preventing the use of funds for non-essential purposes such as gambling. This approach enabled local authorities to better manage public resources and ensure aid reached its intended recipients.

By extending this model, São Paulo’s microloan program addresses the common obstacles small producers face in traditional lending channels, such as lengthy approval times and high costs. The blockchain infrastructure empowers administrators to oversee credit distribution, boosting lender confidence and ensuring that transaction conditions remain stable—an essential factor for public sector financing.

Regulatory Developments in Brazil’s Crypto Sector

Meanwhile, Brazil’s national approach to cryptocurrency regulation is evolving. The government is considering extending the IOF financial transaction tax to cross-border transfers involving cryptocurrencies and stablecoins, effectively treating them as foreign-exchange transactions. This move comes as stablecoins now account for about two-thirds of digital asset transactions in the first half of 2025, while Bitcoin represents just 11%. Authorities are seeking to ensure that digital asset flows comply with existing foreign-exchange regulations, reflecting a growing focus on oversight as the sector rapidly expands.

Shifting Blockchain Strategies Amid National Delays

The São Paulo microloan project illustrates a broader trend in Brazil, where local governments and private companies are advancing practical blockchain solutions even as the central bank’s national digital currency, Drex, faces implementation delays. While Drex remains stalled by bureaucratic challenges, municipal initiatives like microloans and targeted aid distribution highlight blockchain’s potential to address real-world economic issues. Tanssi’s decision to use a private blockchain underscores the need for cost predictability in public projects, avoiding the volatility that can disrupt planning on public networks like Solana.

Balancing Innovation and Oversight

With Brazil’s crypto transaction volume reaching 227 billion reais ($42.8 billion) in the first half of 2025—a 20% increase from the previous year—regulators are working to strike a balance between encouraging technological innovation and ensuring regulatory compliance. The São Paulo microloan initiative, alongside proposed tax reforms, demonstrates a dual commitment: supporting blockchain-based solutions tailored to local needs while strengthening oversight of international digital asset flows to prevent regulatory loopholes.