Bitcoin Booming in Brazil

  • Bitcoin is increasingly popular in Brazil.
  • Rio de Janeiro is competing to become a global Bitcoin hub.
  • Binance, Coinbase and Meta are entering the Brazilian crypto market.

Brazil is becoming a booming market for Bitcoin and the broader cryptocurrency industry. It is estimated that 10 million Brazilians, or ~5% of the population, currently hold cryptocurrencies. According to the Chainalysis Global Crypto Adoption Index, Brazil is ranked 5th in the world for on-chain value received (~$90bn), 7th for on-chain retail value received and 14th overall. According to a poll in late 2021, a plurality of Brazilians support making Bitcoin legal tender, while only 21% oppose it. 39% of respondents mentioned protecting themselves from inflation and economic instability as some of the main reasons for adopting Bitcoin. Over the last year, Brazil has endured inflation rates above 10% on a consistent basis.

Rio de Janeiro, the second-largest city in Brazil, is actively engaged in the global municipal competition to attract Bitcoin. In January 2022, it announced that it would hold 1% of its treasury in cryptocurrency and that it was studying the possibility of offering discounts for citizens who paid their taxes in Bitcoin. In March, it started to implement these measures by announcing that it would be the first city in Brazil to accept Bitcoin for real estate taxes. In response, Binance announced that it would open offices in the city. Other big companies are also entering the market. In January, Meta, the company behind Facebook, Instagram and WhatsApp, filed a Brazilian trademark for various services related to Bitcoin and other cryptocurrencies. According to other reports, Coinbase is also considering the acquisition of 2TM, which is the parent company of Brazil’s largest crypto exchange, Mercado Bitcoin.

In June last year, Brazil was also the first Latin American country to approve a Bitcoin ETF. This February, furthermore, the Brazilian senate’s economic affairs committee unanimously approved a bill to regulate the cryptocurrency industry. If this bill enters law, Brazil would be the largest country in Latin America to implement a cryptocurrency regulatory framework. Grassroots adoption, institutional capital and political goodwill make Brazil an exciting market to watch.
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Nothing in this article constitutes professional and/or financial advice. The content is provided exclusively for informational and/or educational purposes. Nothing is to be construed as an offer or a recommendation to buy or sell any type of asset. Seek independent professional advice in regards to financial, tax, legal and other matters.

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