🇧🇷 Brazil Crypto Report #10: Corinthians ❤️ Crypto Coins

Banco Central Says Anonymity is "Not an Option"; NovaDax Lists 10 New Coins; Celo US$100m DeFi Fund Targets Brazil; Brazil Exchanges Handle US$1.5bn in BTC Volume for August

Sep 07, 2021

Welcome to 🇧🇷 Brazil Crypto Report for the week of Aug 30 - Sept 3, 2021, where we look at the key crypto happenings in Latin America’s largest economy.

Some personal news before we dive in: I’m sadly departing CoinDesk after an incredible 4.5 years. I first joined as a reporter back in the Wild West days of 2017, and then spent the last three years building out CoinDesk’s flagship Consensus conference and other events. It’s been an incredible front row seat to this new industry and I couldn’t be more thankful for the opportunity.

Next week I’ll be joining the team at Filecoin Foundation to build out their events and community efforts. No need to worry - I’ll continue to write 🇧🇷 Brazil Crypto Report each week as my side hustle 😃

There was an important development this week on the ‘crypto-adjacent’ front, which is that the Banco Central announced new restrictions on Pix transfers in an attempt to minimize fraud and thefts. According to CNN Brasil, transfers at night time will now be limited to R$1,000 (~US$200), under the reasoning that suspicious transactions usually happen at night. The Banco Central asserts that the vast majority of transactions that happen during those hours are less than R$1,000 and will remain unimpeded.

This is important because Pix, the bank’s instant payments service, has seen significant uptake since being launched last year and is arguably the closest thing the world has seen to a functioning CBDC (at least in terms of its utility). While Pix utilize a blockchain or distributed ledger, it now features one of the programmable money traits that many expect to eventually see deployed with CBDCs.

One of the key distinctions between a CBDC and a decentralized cryptocurrency is the question of censorship resistance, with the value proposition for bitcoin being that it allows the individual to transact with whomever they want, whenever they want and in whatever quantity they want without reliance on a third party gatekeeper or intermediary. Governments that are under pressure to comply with global financial integrity standards cannot accept an “anything goes” system and will need to apply rules and restrictions to their new forms of digital cash, which purists in the cryptocurrency world will argue is a form of financial censorship.

This tension surrounding the “who”, “when” and “for what” purposes CBDC money can be used will become more salient in the next couple of years.

💥 This week’s report also touches on:

1️⃣ Continuing the trend of crypto exchanges sponsoring sports teams, Mercado Bitcoin inks a partnership with Corinthians and will be featured on the Sao Paulo club’s jerseys

2️⃣. 28% of Brazilian investors own bitcoin, per a new survey from FGV and Hashdex

3️⃣. Brazil’s second-largest exchange NovaDax lists AXS and 9 other new tokens, SOL giveaway promo

4️⃣. Banco Central reaffirms its position that crypto is a “high risk” and “speculative” asset, hints Digital Real coming in 2024

5️⃣. US$1.5bn in August bitcoin trading volumes on Brazilian exchanges

6️⃣. Celo’s US$100m ‘DeFi For the People’ campaign will target the Brazilian market

7️⃣. Brazil’s second-largest TV network SBT launches NFTs of billionaire founder Silvio Santos

8️⃣. BRZ stablecoin is now lives on bitcoin sidechain RSK

Additionally, if you have a subscription to The Block, I highly recommend taking a look at Kristin Majcher’s deep dive into Brazil’s Pix instant payments system.

Did I miss anything? Have ideas for new content, topics or formats? Leave a note in the comments or find me on Linkedin, Twitter or Telegram at @AaronStanley, or you can hit reply to this email! As always, thanks for reading!

Obrigado,

Aaron

If you’re new here, the meta-thesis for this publication is that Brazil - with a population of 214 million and a US$1.8tn economy - is the most overlooked crypto market in the world. The objective is to highlight the important news and provide useful context for the estrangeiro (foreigner) English-speaking audience.

If that’s something you’re interested in, then hit subscribe if you haven’t done so already read on👇 Please share with others who might find it interesting!

Bitcoin Outperforms Brazilian Investment Market for August

Bitcoin was up nearly 12% against the Brazilian real for the month of August and significantly outperformed other popular investments in the domestic market. According to Exame, surpassed the Ibovespa index, savings accounts and fixed income alternatives for the month.

BTG Pactual digital @BTGPDigital

AGOSTO - Bitcoin (BRL): +11,87% - CDI: +0,40% - Poupança: +0,30% - Dólar Comercial: -0,74% - Ouro (BM&F): -1,80% - Ações (Ibovespa): -2,48% - Fundos Imob. (IFIX): -2,63%

FGV Survey: 28% of Brazilian Investors Own Bitcoin, Making it 3rd Most Popular Investment

The study, which surveyed 576 people in February and March, was conducted by the Getulio Vargas Foundation and asset management firm Hashdex. According to CoinTelegraph Brasil, 28% of respondents said that they own bitcoin in their investment portfolios.

Brazilian Exchanges Process US$1.5bn in August Bitcoin Trading Volume, up 5% from July

Brazilian exchanges moved 31,647 bitcoins during the month of August, with Binance leading the way for the sixth consecutive month and making up 35% of that volume.

August 28th was the most popular trading day and saw 378.8 bitcoins traded, according to CoinTelegraph Brasil, citing data from Cointrade Monitor.

It’s important to note that this figure solely represents spot trading on exchanges and does not include trades executed peer-to-peer or over-the-counter.

NovaDax to Give Away SOL Tokens; Lists AXS and 9 Other Tokens

The second-largest Brazilian exchange by volume, according to CoinGecko, will give away SOL - the native token of the Solana blockchain - to users by way of a trading competition.

According to CoinTelegraph Brasil, the tokens will be awarded to the ten users who carry out the highest volume of transactions during the promotional period, with each winner receiving up to US$150 worth of SOL.

The giveaway comes as part of NovaDax’s Nova Friday promotional campaign. César Trevisan, head of business development at NovaDax, explained:

“Nova Friday includes trading competitions, Airdrop, tax exemption, lotteries, among other actions we promote; and it is part of our strategy to regularly shake up the cryptocurrency market in Brazil. If you are our trader, don't miss this opportunity to profit from SOL's movement.”

SOL has surged in price over the second half of August, eclipsing US$100 per token and continuing northward to US$181 at press time.

NovaDax also listed 10 new tokens this week and now offers more than 60 tokens to its 750,000 customers in Brazil. The most notable is AXS, one of the native tokens of the popular Axie Infinity “play to earn” blockchain game.

The other coins listed include MANA, ENJ, UMA KNC, Ren, YFI, ZRX, GRT and BAT.

“Our mission is to popularize the crypto market. To achieve this, there’s nothing better than to offer more options to Brazilians who want to invest with us,” Trevisan told CoinTelegraph Brasil.

Banco Central: Crypto is “Speculative” and “High Risk” Asset Class; Anonymity is “Not an Option”

Fábio Araújo made the remarks on behalf of the Brazilian Central Bank at a Senate hearing examining the Digital Real project.

According to Portal do Bitcoin, he explained:

“CBDCs should not be confused with crypto assets. The Banco Central maintains the opinion that crypto assets are speculative assets and carry high risk for individuals.”

The hearing was organized by the Senate’s Commission on Science, Technology, Innovation, Communication and Information and assessed the Digital Real’s development and implementation.

Araújo estimated that the Digital Real will be launched in 2024, with the testing phase ramping up in 2022:

“Our objective is to clarify the demands that society presents for the Digital Real. After this, we will soon move into a test phase with a proof of concept and innovation lab, and this should occur sometime in 2022.”

Speaking at a separate event on financial integrity, a Banco Central official affirmed that anonymity will “not be an option” in regards to cryptocurrency trading.

Maurício Maura, director of relationships, citizenship and conduct supervision at the BC, said that even though the Senate and relevant bodies are still working through a framework for crypto asset regulation, the names of those involved in crypto trading and operations will need to be known.

He explained:

“I can affirm that anonymity will not be an option.”

The comments were reported by Valor Investe.

After Pix Account Blocked, Bolsonaro Nephew Seeks Bitcoin Donations to Fund Independence Day Rallies

Léo Índio is seeking bitcoin donations to help fund rallies in support of president Jair Bolsonaro on September 7, Brazil’s national independence day, after his bank account was blocked from receiving funds via Pix.

A judge at the Brazilian Supreme Court ordered Índio’s Pix key blocked. The ruling came in response to a complaint from Brazil’s Attorney General saying that Índio’s group “has summoned the population through social networks to practice criminal and violent acts” on the holiday, according to the news service UOL.

To circumvent the blockage, Índio took to Instagram to share his frustration and his bitcoin address.

Portal do Bitcoin notes that as of press time, no one had yet donated to Índio’s bitcoin address.

The Banco Central also announced new restrictions on Pix transfers, limiting the size of night-time transfers to R$1,000 (roughly US$200) in an attempt to prevent criminal activity.

Corinthians ‘Fan Token Offering’ Raises R$8.8m in 2 Hours; Club Inks Partnership with Mercado Bitcoin

The $SCCP sale raised US$1.7m in two hours on September 2, with 850,000 tokens sold at US$2 each, in what is being reported as the second most successful ‘fan token offering’ hosted by the Socios platform and a record for a Brazilian club.

Exame reports that Corinthians will split the proceeds equally with Socios, meaning that the Sao Paul football club will net R$4.4m or US$850,000.

The tokens were purchased by fans from 150 countries, and 50% of the buyers were outside of Brazil.

Corinthians, which claims more than 30 million among its fan base, also inked a sponsorship deal with Mercado Bitcoin - Brazil’s largest crypto exchange

The Corinthians jersey will bear the Mercado Bitcoin logo from September 2021 to December 2022. The two entities will also undertake joint educational efforts on crypto topics as well.

Mercado Bitcoin CEO Reinaldo Rabelo told CoinTelegraph Brasil:

“The partnership with Corinthians makes total sense for Mercado Bitcoin because we share the same vision of democratization, pioneering and innovation. Additionally, we believe that the crypto universe and the world of football, together, will create new modes of engagement with fans and generate profitable ventures.”

As we covered in this newsletter last week, Corinthians is also launching its ‘fan token’ $SCCP which will trade on the Mercado Bitcoin platform.

Corinthians President Duilio Monteiro Alves said in a statement:

“Each step we take towards the transformation of Corinthians is facilitated by partners who understand the moment of digital platforms and fans' habits. Being alongside Mercado Bitcoin, the largest cryptoasset platform in Latin America, gives us the certainty that we are innovating and opening up new possibilities for marketing and engagement. The future of the club lies in this innovation.”

Brazilian NFT Liquidity Platform Theos Undertakes Initial Offering

The platform aims to provide NFT minting, trading and liquidity provision for different types of creators.

According to Valor Investe, artists and creators will be able to create NFTs on the platform, bring them to market and auction them off.

The Theos platform, created by Sthorm.io, is being optimized to run on the Cardano blockchain - which is expected to rollout smart contract functionality in its upcoming Alonzo upgrade. It will allow users to create decentralized liquidity pools, investment funds and the ability to use NFTs as collateral.

Pablo Lobo, a partner at Sthorm, explained:

“Theos is probably the most simple tool on the market to include the entire universe of cryptocurrencies, of both fungible and non-fungible tokens.”

Theos boasts Virgin Galactic co-founder Alex Tai and former Guns N’ Roses drummer Matt Sorum among its early supporters.

Brazilian TV Network SBT to Launch Commemorative NFTs

The tokens will feature images of iconic SBT creator and personality Silvio Santos to commemorate the network’s 40th year of existence. SBT is the second largest television network in Brazil and the first in the country to enter the buzzy world of non-fungible tokens, according to a report by Exame.

Four different NFTs of Santos, who has an estimated net worth of US$3.2bn, will be minted and auctioned to the public. They will be minted on the Polygon blockchain, the Ethereum Layer 2 that has seen significant uptake in recent months, and will be sold via the platform InspireIP. Users can purchase the NFTs with a credit card or other cryptocurrencies via MetaMask.

Fernando Pensando, head of innovation at SBT, said in a statement:

“The offering of these NFTs to fans of SBT and Silvio Santos symbolize a new moment for SBT in the broadcaster’s digital transformation process.”

Caroline Nunes, CEO of InspireIP, hopes that the offering will generate more interest in and understanding of NFTs in Brazil:

“SBT’s NFT auction will allow for knowledge of cryptocurrencies and blockchain to reach the entire population. We have grandchildren, parents and grandparents researching about this technology, wanting to participate in the auction and putting in bids. It’s more much more than a simple NFT auction; it’s a cultural revolution.”

(Photo credit: Exame)

Celo’s US$100m ‘DeFi for the People’ Fund to Target Brazil

The consortium brings together notable projects such as Aave, SushiSwap, Curve, 0x and PoolTogether with the objective of making decentralized finance accessible to anyone with a mobile phone.

The program will provide more than US$100m worth of educational initiatives, grants and incentives.

Brazil figures receive significant attention in the campaign, given the its fintech and mobile-friendly population and Celo’s growing community in the country.

Celo’s Camila Rioja, who recently joined in May 2021 as the project’s Brazil Lead, told Exame:

“Celo and cLabs has a special interest in the vibrant Brazilian market and its special characteristics. I joined the team to bring my local expertise in the area of blockchain, startup consulting and legislation to develop our ecosystem in the country.”

BRL-Pegged Stablecoin BRZ Integrates with Bitcoin Sidechain RSK

BRZ, the largest stablecoin by volume pegged to the Brazilian Real, will be the first Brazilian cryptocurrency with smart contract functionality on the bitcoin blockchain.

Solange Gueiros, blockchain developer at Transfero - which built BRZ, told CoinTelegraph Brasil:

“RSK brings together the best of both worlds: the security of bitcoin and the power of Ethereum smart contracts.”

The integration also means lower transaction costs for users: fees on RSK are currently 2,000% lower than on Ethereum

BRZ is now operable on Ethereum, Solana, Stellar, Algorand, Binance Smart Chain and RSK.

That’s all for this week! Thanks for reading!

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