🇧🇷 BCR #47: Binance Inks New Fiat Partner as Competition Pounces on Payment Woes
Also, Brazil's "Bitcoin Law" to be voted on this week; Coinbase talks plans for Brazil
Welcome to 🇧🇷Brazil Crypto Report for the week of June 20-24. Hopefully everyone is settling into crypto winter. I for one am enjoying buying the dip on bitcoin under $20k. I honestly never thought I’d have this opportunity again so I’m aproveitando a oportunidade.
🤩 I’m excited to announce BCR Institutional, our first premium service, will launch in July. This product will focus on providing bitcoin and cryptocurrency education to large investors in the Brazil market. It will consist of investor-focused content (in Portuguese), monthly roundtables and networking/chat functions. Stay tuned for more details.
🚨We’re entering week two of Binance’s suspension of BRL deposits and withdrawals via Pix after it terminated its relationship with Capitual, its local fiat on/offramp, which it had partnered with since October 2020. The situation is quite complex but important given Binance’s dominance in the Brazilian market. If you want to better understand the timeline of events and why the situation matters, I highly recommend this podcast I recorded with Saori Honorato of Portal do Bitcoin who has been following the developments closely, as well as this piece by Portal do Bitcoin editor Claudio Goldberg Rabin.
🗞 After the podcast with Saori was recorded on Thursday (June 23) morning, Binance announced that payments services would be restored “soon” via a new partnership with Latam Gateway. The new firm will be responsible for intermediating transactions between the exchange and the Banco Central’s payment system. Founded in 2019, Latam Gateway provides payment services in Brazil to e-commerce, gaming and payment aggregation businesses (Portal do Bitcoin does a deeper profile on the company here). Binance said in a statement:
“The integration process with Latam Gateway will be completed soon, when transactions (deposits and withdrawals) will be fully normalized. Binance will keep the community informed.”
In the meantime, Binance has been contrite and encouraging users to take advantage of other (albeit less convenient) deposit and withdrawal channels.
🤯 Needless to say, many of Binance’s 4 million customers in Brazil aren’t happy about the situation.
🤺 Rival exchanges in the domestic market have bounced on the opportunity, seeing this as an opportunity to potentially put a chink in Binance’s armor by siphoning away disgruntled customers.
The story gets a juicier still as Capitual issued a statement on Friday defending itself contending that it bears no responsibility for the interruption in payment services to Binance clients. It said that it has been adapting its platform over the last two months to reflect new compliance rules issued by the Banco Central, and that it was waiting on Binance to update its systems to reflect the changes:
“The partner exchanges KuCoin and Huobi have adapted their systems to the changes that have taken place on the Capitual platform and the services provided to their users in transactions with reais happen regularly. In the case of Binance, there was no such suitability.”
Disclosure: Please note that I have ZERO financial interest or engagements with any of the companies mentioned here. I’m not taking sides, and I have no agenda other than to accurately convey what’s happening and help readers connect the dots and form their own conclusions.
🗞 In other Binance-related news, the exchange will be hosting a three day exclusive workshop on blockchain and crypto assets for Federal Police in Brasilia this coming week. Topics to be discussed include core crypto and blockchain concepts and the exchange’s anti-money laundering policies. Representing Binance at the event will be Matt Price, a former IRS agent; Jarek Jakubcek, the company’s Head of Intelligence and Investigations for Asia-Pacific; and Renato Barreto, an investigations specialist for Latam.
🏛 Crypto Legislation Update: The “Bitcoin Law” is the on the Chamber of Deputies’ agenda and is expected to be voted on next week. We’ll be watching closely 👀
🙏 Thanks to our partners at HBAR Foundation for supporting 🇧🇷 Brazil Crypto Report! If you're a Latam entrepreneur or developer with an up-and-coming project or idea and need some support, take a look at the HBAR grant program. They're seeding projects focused on DeFi, fintech, NFTs, sustainability and so much more. They also offer a plethora of other resources to help builders bootstrap. Do yourself a favor and check them out! 👊
🗞Brazil Crypto News Rundown
Coinbase’s president of business development Nana Murugesan reaffirmed the exchange’s commitment to Brazil, despite layoffs and the market downturn, in a feature interview with Valor. Some interesting nuggets from the interview include:
Coinbase’s Brazilian subsidiary is expected to have 130 employees, all working remotely on a permanent basis
The exchange plans to offer its full slate of 170 assets in the country
Murugesan reckons that Brazil’s pending crypto legislation and regulatory framework will be “market friendly” and that it will stimulate more institutional investors and individuals to the market.
Murugesan says that Coinbase is “here to adapt our global products to Brazil’s needs,” though she did not discuss potential expansion via in the country via acquisition. She commented:
“The potential for cryptocurrencies in Brazil is huge and we see regulation as a facilitator of that. Brazilians are seen as early adopters of new technologies and are open to financial innovation. From technologies to improve payments to empowering microfinance projects, providing inflation protection instruments and access to capital, Brazil's entrepreneurial culture is well positioned to lead Latin America on web3.”
Mercado Bitcoin looks to follow the trajectory of XP and Nubank as it expands domestically and internationally, per comments by CEO Reinaldo Rabelo:
“We live in a country that is an 'early adopter' of technologies that impact everyday life, but is mega-conservative when it comes to high-value investments and financial operations…Nubank and XP also needed to prove themselves as safe and serious [as traditional banks], with just as robust governance, but delivering a better experience for the consumer.” (Forbes)
Hashdex CEO Marcelo Sampaio affirmed his long-term bullish view on crypto in an interview with Estadao, arguing that crypto is a better investment today than it was a few months ago. He conceded, however, that there is “still a lot of ugly stuff that can happen” as we enter a crypto winter.
A new cryptocurrency ETF, BLOK11, is trading on the B3 Exchange. The fund was created Investo and replicates the MVIS Crypto Compare Smart Contract Leaders Brazil Index, which is managed by Market Vector Index Solutions. It will be comprised of a basket of tokens native to smart contract platforms such as Ethereum, Cardano, Solana, Avalanche and more. (Exame)
André Esteves, CEO and Chairman of BTG Pactual, argued that bitcoin is “not digital gold” and that this narrative was nothing more than an illusion created by low-interest rate policies of the world’s major economies since 2007. His remarks came at the Global Mangers Conference Brazil 2022:
“This inflated the prices of many financial assets and created several theses from the point of view of portfolio diversification that do not necessarily prove to be true when there is a reversal of the scenario.” (Livecoins)
Nubank opened bitcoin and ether trading for select customers within its platform via a partnership with Paxos. Users are unable, however, to withdraw the coins from the platform. Also, SmartPay announced that the new version of SWAPiX can be used directly on the Nubank platform to convert reais into tether (and vice versa) through Pix. (CoinTelegraph Brasil) (Portal do Bitcoin) (BlockNews)
Valor Capital Group managing partner Michael Nicklas expressed enthusiasm for investing in the Brazil crypto scene despite the market down turn in an interview with Portal do Bitcoin editor Claudio Goldberg Rabin.
Bybit launched a new staking product called Bybit Gains for Brazilian users promising an annual yield of 12.75%. (BlockNews)
Vórtx is launching a platform for managing specialized ETFs, such as those holding cryptocurrencies and NFTs, on the B3 exchange. (BlockNews)
Mercado Bitcoin listed eight new tokens, including DeFi Pulse Index, Stepn, Metaverse Index and others. (CoinTelegraph Brasil)
51% of the Latin Americans have already transacted with cryptocurrencies, according to Mastercard’s New Payments Index 2022. It surveyed 35,000 consumers around the world and found that 51% in the Latam region have made at least one transaction involving cryptocurrencies. (CoinTelegraph Brasil)
Fan token platform Socios.com is offering a new set of immersive experiences for holders of tokens issued by Flamengo, Fluminense, Corinthians and other clubs in the Brazil market. Socios business development director Felipe Ribbe told CoinTelegraph Brasil in an interview.
“People can expect an increasingly closer relationship between Socios and the Brazilian public, with the clubs, this will end up leading to us having fan tokens, more and more, with utility. Our focus is to offer more and more unique experiences, money can't buy experiences.”
Mercado Pago, the payments arm of Mercado Livre, will now allow users to deposit bitcoin and ether from external addresses to its wallet - giving the platform a service offering very similar to that of a traditional crypto exchange. Users remain unable to withdraw assets to external accounts. (CoinTelegraph Brasil)
Gen Z investors are more open to risky investments like cryptocurrencies, per a new study by ANBIMA, a trade group representing Brazilian capital markets and financial entities. (Livecoins)
Two prominent Brazilian startups, Zapay and ClickBus, have partnered with MOSS to purchase MCO2 tokens to offset their respective carbon footprints. (CoinTelegraph Brasil)
The Beplix app went live on June 23, offering Brazilian users a platform that integrates crypto with everyday financial service needs such as bill payment and Pix transfers. The platform was founded by veterans Vinicius Marinho and Thiago Mozzatto. Marinho commented:
"Anyone will be able to access cryptocurrencies in an uncomplicated way, without having to face the bureaucracy that exchanges put on their transactions. We want to make digital currencies, in fact, a means of payment." (CoinTelegraph Brasil)
Brazilians can join the wait list for Saga, the Web3 mobile phone announced by Solana Labs this week. A refundable deposit of $100 is required. (BlockNews)
CAIXA Points Program users can now use their card to points to purchase bitcoin and Ethereum via a partnership with DOTZ. (CoinTelegraph Brasil)
The National Education and Research Network intends to use the Brazil Blockchain Network for the generation, authentication and preservation of digital versions of academic diplomas. (Exame)
The Inter-American Development Bank is looking to incubate tokenized solutions to promote biodiversity in Latin America via its new “Digital Tokens for Biodiversity Innovation” challenge. (BlockNews)
Brazilian surfer Gabriel Medina is launching a Kauai Ventures, a “celebrity fund” VC focusing on blockchain projects and other disruptive tech. (CoinTelegraph Brasil)
Brazilian fintech LoopiPay launched a solution allowing users to buy or sell more than 100 different cryptos directly from a Web3 wallet via Pix. The product is being used in the BombCrypto play to earn gaming community as well as the Ledger Live app. (BeinCrypto)
Alter (formerly known as Alterbank), a fintech that offered a bitcoin cashback credit card, is ceasing its activities and giving users until August 6 to withdraw their bitcoin and BRL balances. The company was acquired by Méliuz for R$25.9m last summer and has been merging services. (CoinTimes)
🎮 NFTs, Gaming and Metaverse
Brazilian skateboarder Bob Burnquist did an interview with Valor about his interest in NFTs and his new CriptoCria program.
Brazilian singer Nando Reis launched a virtual wallet for fans to access experiences through NFTs, fan tokens and other content. (CoinTelegraph Brasil)
Loud, the Brazilian game organization, announced the launch of Spacecaps - which will create its own ecosystem of Web3 games. (BlockNews)
Galeria Leblon NFT is opening June 29 in the Leblon Shopping mall in Rio de Janeiro. It will feature an exhibition by the artist Beto Gatti. (BeinCripto)
🏛 Public Policy, Regulation and Enforcement
Banco Central President Roberto Campos Neto said that his institution “is prepared” to be the regulator for the Brazil cryptocurrency market. Under the proposed legislation being considered in the Chamber of Deputies, the Executive Branch will be tasked with appointing a regulator to oversee the industry. It is widely assumed that Bacen will be selected for the job. Campos Neto commented at a press conference:
“We have been talking to the CVM on the subject. The project is the first step towards market regulation. We are prepared….I think we have a lot of work to do. This PL is a starting point, we talk about how to regulate brokers. We still have quite a long way to go in terms of cryptocurrency regulation.” (InfoMoney) (Portal do Bitcoin)
A new scam circulating on Instagram promises profits from bitcoin mining, paid out via Pix. (Livecoins)
Rodrigo Marques, CEO Atlas Quantum - one of the largest crypto pyramid schemes ever in Brazil, was reportedly found in a mansion near Barcelona after disappearing in 2019. (Livecoins)
A victim of the GAS Consultoria pyramid scheme fell into a new scam related to the company. (Livecoins)
Officials in the town of Balneário Camboriú shot down reports that it would be the first municipality in Brazil to launch its own cryptocurrency as fake news. (Livecoins)
Civil Police in Rio Grande do Sul arrested 15 people in a crackdown on illegal crypto brokers tied to organized crime. (Livecoins)
Federal Police seized crypto assets from hackers linked to coffee companies in Espirito Santo. (Livecoins)
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