The crypto landscape in Brazil

Brazil is currently one of the top five countries with the largest number of crypto investors; it has over 10 million users, about 5% of the population, behind only India, the United States, Russia and Nigeria.

Despite huge losses worldwide, investments or payments using cryptocurrencies continue to dominate the media as many still have questions about crypto’s risks and benefits. Safety is always at the forefront of every discussion. Many experts are concerned about the risks crypto-payments pose and their increasing use in fraud schemes and other crimes.

Crypto regulation and partnership with Open Finance, Pix and CBDC

Crypto assets are not yet regulated in Brazil, but will be soon. The proposed bill, currently being debated by the House of Commons, would create a set of rules to provide additional security for investors and improve the growing oversight of crypto-related companies. Most exchanges reacted positively to the news from the Brazilian Securities and Exchange Commission (CVM), which said that the guidelines are not intended to interfere in the industry – especially to avoid affecting innovation processes. The stock exchanges have noticed that the market will benefit from greater security and reliability. Many international companies are waiting for the regulations to be released, studying options and preparing the user experience to enter the Brazilian market, as they expect to see significant demand once the regulations are in place. Among other measures, the proposed bill states that both national and international companies are required to obtain licenses from the regulator.

Brazil’s Central Bank (BCB) is optimistic about the country’s crypto regulation and has proposed interconnection with a CBDC (Digital Real), Pix and Open Finance, as well as potential opportunities to transform the financial services market and connect to the metaverse. Roberto Campos Neto, president of BCB, claims that digital assets will lead to a future “tokenized” economy.

Partnership and engagement between regulators and companies

The market is currently operating in a zone of many unanswered questions, but experts have noted that regulators, innovators and private market players must work together to build a safe and secure crypto environment.

The giant cryptocurrency exchange Binance is actively studying Brazil to better understand the local market and improve its approach to preventing, investigating and fighting financial crime. In addition, Binance holds several thematic workshops with a number of government agencies to address the concepts underlying blockchain and cryptoassets, as well as other issues. The aim is also to raise awareness of Binance’s Anti-Money Laundering (AML) policy. Attendees will learn more about the tools and processes offered by the company to help authorities fight cyber and financial crimes involving digital assets. Media recently reported that Binance had ended its partnership with Brazilian payment provider Capitual, and legal proceedings are currently underway to resolve the matter. This situation reflects the complexity of current regulations and the vulnerability of some of the industry’s models and flows.

Digital giants enter the market

A new Brazilian player recently entered the market and has had a significant impact. Just three weeks after the creation of Nu Cripto, Nubank announced that one million individual customers had used the bank’s app to buy cryptocurrencies. With over 50 million users in Brazil, the company aims to democratize crypto and offer its customers new financial opportunities. The Brazilian unicorn is also leveraging the trust in its brand and its modern user experience to streamline access while increasing security for people investing in crypto, which has attracted global attention. Bexs is also part of the Nu Cripto solution offering an FX-as-a-Service platform integrated with Nubank’s app, enabling Brazilian investors to access crypto portfolios.

Other major players are targeting the Brazilian market and not only for investments, but also for payments. Argentina’s Mercado Libre, one of Latin America’s largest e-commerce companies, launched its own cryptocurrency, called Mercado Coin, on its platform. Mercado Coin is used to shop at Mercado Libre and receive rewards (cashback). The company believes blockchain technology has significant potential to provide more secure transactions. The new crypto option is offered to its 80 million Brazilian users, and the company plans to start using Mercado Coin in other Latin American markets as well.

The future of crypto in Brazil

The future will depend on how regulations are shaped here and in other countries – and how much crypto prices can recover. Still, it seems there’s no going back now. Traditional banks follow this market closely and pay special attention to Gen Z consumers, who are most likely to be attracted to crypto. Furthermore, a growing number of stores are accepting cryptocurrency payments. According to CoinMap, over 900 Brazilian businesses currently accept crypto payments. They were disruptive and their future has been somewhat uncertain over the last decade, but interest from companies and governments leads us to believe that crypto adoption is on the way to make cryptocurrency an efficient and robust investment and payment option in Brazil and around the world .

About Vinícius Vieira

With over 10 years of experience in global payment processing, Vinícius’ areas of expertise include innovation in digital payments and fintech, global procurement, multi-currency payment processing, cross-border payments in Brazil and Latin America, product and business development. At Bexs Pay, his main challenge is to lead commercial growth while bringing innovation and technology – which, through payment transactions, facilitates access to global goods and services for Brazilians and the best of Brazilian goods and services for the world.

About Bex

Bexs connects Brazil to the world with the best team and innovative currency and payment technologies to bridge companies and customers on all continents. The group brings together the solutions developed by Bexs Bank, which has been providing tailored transactions and API capabilities to the foreign exchange market for over 30 years, and Bexs Pay, a pioneering digital payment provider for cross-border markets. This ensures Brazilian customers access to the best the world has to offer and gives Brazilian products and services cross-border reach. Bexs has already handled millions of payments and currency transactions for global companies including TikTok, Worldline, Kwai, Thunes, Nubank, among others.