On Tuesday, November 29th, Brazilian lawmakers passed a bill called PL 4401/2021 that enables “the inclusion of virtual currencies and air mileage programs in the definition of ‘payment arrangements’ under the supervision of the Central Bank.” This means Bitcoin and other cryptocurrencies will be fully regulated and overseen by Brazil’s central bank. The new bill helps to give legitimacy to Bitcoin and other cryptocurrencies because businesses will be able to accept crypto as payments for goods and services. The list of which cryptocurrencies will be accepted has yet to be revealed.
Looking further into the discussions related to passing the bill, the Brazilian government has been contemplating this move since 2017. Back then, discussions first began about whether or not to use virtual currencies as legitimate forms of payment. After several debates on the matter, legislators finally codified crypto payments into law. Moves like these are bullish because many institutional investors are waiting for regulation before buying large amounts of crypto (Bitcoin in particular). It’s important to note that the bill did not establish Bitcoin/crypto as a national currency. However, accepting crypto for payments can be viewed as the next best thing. The bill still needs to be signed by the President of Brazil, which might not be guaranteed. But that is a story for another article. If the President does not sign the bill, it still represents the fact that Brazilians view crypto as a store of value and a legitimate payment system.
Crypto in Brazil
Currently, 7.8% of Brazilians own some form of cryptocurrency, which equates to about 16 million people. In 2021, Brazilians traded $11.4 billion in stablecoins which nearly tripled the amount traded in 2020. Top stablecoins appear to be $USDT, $USDC, and $DAI. Binance has seen a quadrupling of trading volume on its exchange since 2020.
Brazil has a relatively equal amount of male and female traders in the crypto industry, with 55% being male and 45% being female. This is in stark contrast to the crypto industry as a whole which is largely male. One study suggests that only 15% of females own or trade Bitcoin. The numbers are likely lower for altcoins and DeFi projects.
Several sources point to Mercado as one of the leading exchanges for buying crypto in Brazil. Mercado is a Brazilian-only exchange with 3.7 million users that lists 200 digital assets. It’s important to know that Mercado is a centralized exchange, so keeping your coins stored in the exchange could be risky. Obviously, for the highest level of security and ownership, it’s recommended to store your coins on a hardware wallet such as Trezor or Ledger. But Mercado seems like a solid on-and-off ramp for Brazilians to use that regularly trade crypto. Another nice aspect of Mercado is the entire leadership team is doxxed right on the website. This is probably how it should be done for any centralized exchange.
It seems that crypto in Brazil is picking up steam with recent legislation passed, increasing usage rates, and multiple exchanges that provide a wide range of digital assets. It’s also interesting that Brazilian women are far more represented than women in the crypto industry overall.
Perhaps this topic warrants further exploration.
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