🇧🇷 Brazil Crypto Report #12: Flamengista Coins; Visa's Bold Moves in Brazil; Digital Real Interoperability
Welcome to 🇧🇷 Brazil Crypto Report #12 for the week of Sept 13- 17, where we look at the key crypto happenings in Latin America’s largest economy.
This week we’re looking at:
1️⃣ Flamengo, the Rio de Janeiro football club with a fan base of 40 million, is launching its $MENGO fan token in a partnership
2️⃣ A bunch of new NFT drops from Brazilian companies and personalities, including Ambev - the world’s largest beer manufacturer
3️⃣ The Bitcoin King lambo seized by Federal Police in a summer bust is now on display at the Oscar Neiymeyer Museum in Curitiba
4️⃣.Caixa Econômica, one of Brazil’s largest banks, is requiring new that new employees possess knowledge of bitcoin, blockchain and cryptocurrencies
But before we dive into that, I wanted to highlight some of the big statements payments giant Visa has been making in the region. Its vice president of new business Eduardo Abreu announcing earlier in September that the company is taking steps to integrate crypto assets like bitcoin onto its platform, and an official announcement of this is expected later in the year. Abreu stressed that heightened crypto adoption - for use cases such as payments, savings and cashback - in the region will require greater integration with traditional banking activity - which is obviously an area where Visa is well-positioned to help.
This week, Érico Fileno, who serves as Visa Brasil’s innovation lead, affirmed at an event for media that blockchain represents a new era of the internet and that the company plans on becoming more involved in the ecosystem. And this involvement won’t just be in the realms of payments, but rather digital identity, the metaverse and the broader meta-trend of the digital becoming an extension of physical reality.
Visa has of course made similar statements and commitments in other regions of the world where it operates, but I find its bullishness on crypto and blockchain technology in Brazil and the rest of Latin America to be a validation of why I decided to spin up this newsletter in the first place.
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!
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.
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Binance is hiring for four Brazil-based positions:
Business Development Manager responsible for building out banking relationships and the exchange’s Brazil fiat business
Senior Legal Counsel responsible for handling local licenses, contracts and regulatory matters
Operations Manager to help support local government relations, marketing and tech operations
Community Manager Intern who will help build and develop relationships locally, facilitate events and create social media content
Mercado Bitcoin has 23 job openings on its website, with the majority of these being for technology positions such as developers and product managers.
For Portuguese readers, CoinTelegraph Brasil has a handy run-down of different Brazil crypto related jobs here.
Have a job posting to highlight? Feel free to send my way
The refurbished “Bitcoin King” lambo confiscated by Federal Police this summer is now on display at the Oscar Neimeyer Museum in Curitiba. The vehicle belonged to “Rei do Bitcoin” Cláudio José de Oliveira before being seized by Federal Police in a bust and subsequently repainted.
It now serves as the centerpiece of the “Federal Police in Action in Parana” display at the Oscar Neimeyer Museum until October 3. Neimeyer was one of the most influential architects of the 20th century. He was responsible for the look and feel of much of modern Brazil, with his signature achievement being the design of Brasilia’s civic buildings. (Portal do Bitcoin)
(Photo credit: Federal Police)
Flamengo, arguably the most popular football in Brazil (at least by the size of its fan base), will launch its $MENGO token on the Socios platform later this year. As part of the deal, Socios will also serve as an official sponsor of the club until 2025. Holders of the token will have special ability to vote on uniform details, pre-game warm up music choices, etc. (CoinTelegraph Brasil)
A Brazilian cryptocurrency has finally been listed on a major US exchange. MCO2, issued by MOSS, earned a listing on Gemini, the exchange operated by the Winklevoss twins. MCO2 is a token that represents carbon credits with a focus on preserving the Amazon region. (CoinTelegraph Brasil)
Brazilian consulting firm GGV Inteligência em Vendas is tokenizing its shares using blockchain technology and distributing them to employees. The move will give employees and equity holders the ability to buy, sell or divide shares in in rapid fashion, explained Anderson Souza, CEO of tokenization firm ApolloEx, which is assisting with the project.
GGV CEO Geraldo Hisao explained that tokenized equity will better incentivize employees to take ownership and feel empowered on the job.
"Tokenizing assets and dividing GGV's equity in the partnership format is a technological and safe way to encourage the talents we have at GGV and make them grow with us. That's because, when (employees) realize that the company's development is linked to their own development, business success increases exponentially" (CoinTelegraph Brasil)
Bitcoin is still far from reaching “mainstream adoption” in Brazil, according to QR Capital’s director of investments Alexandre Ludolf. QR Capital operates a variety of cryptocurrency focused investment funds and ETFs for both retail and accredited investors.
In an interview with CoinTelegraph Brasil, Ludolf explained:
Even among the small group that knows what bitcoin and ethereum are, many can’t see the transformative potential that the technology will have on our way of life. I still think we are in the initial phase, very far away from the mass adoption that we’ve seen with technologies like smartphones, for example. Nonetheless, I believe that the investor who enters the market today still will see a long and prosperous journey on the mass adoption curve. When an emerging technology begins to reach critical mass, it’s an unstoppable phenomenon.”
Caixa Econômica Federal, one of Brazil’s largest banks, is requiring that new employees have knowledge of bitcoin, blockchain and cryptocurrencies. The topics were inserted into the job description for 1,000 Técnico Bancário positions, for which it is looking to hire immediately. The positions will pay R$4,486 (US$848) per month, inclusive of benefits. (CoinTelegraph Brasil)
Rodrix Digital, a Brazilian crypto YouTuber with 25k followers, is launching the country’s first-ever reality TV show focused on the Brazilian crypto market. Entitled “Blockchainers - Surfing on the Blockchain Wave”, it will have a Shark Tank format whereby startups sign up and present their ideas before a panel of judges. (CoinTelegraph Brasil)
Brazilian mixed martial arts fighter Vitor Belfort has come out as a “brand ambassador” for the obscure Lith token, which registers at 1030th place on CoinMarketCap. On September 11th, Belfort fought and defeated former world champion Evander Holyfield in a boxing match in the United States. (CoinTelegraph Brasil)
Another ‘agrocoin’ has come to the Brazilian market. Cultecoin was officially launched September 13 with an airdrop that distributed R$130,000 worth of tokens. Cultecoin, which lives on Binance Smart Chain, seeks to boost small rural farmers by stimulating connections between producers and consumers and facilitating access to financial and technical resources. The coin was launched by Culte, a company that provides access to credit and financial services for small producers. It claims to have more than 2,000 farmers in its network across 20 states. (CoinTelegraph Brasil)
Banco Central president Roberto Campos Neto said that the bank is considering allowing national banks to issue stablecoins as a means of eliminating potential liquidity problems for a Digital Real. In this manner, deposits in reais at these financial institutions could be tokenized, with private banks’ stablecoins communicating with each other and using the Digital Real as their conversion currency.
Campos Neto explained that such a solution is being considered in order to avoid liquidity problems within financial institutions that could cause the value of the digital real to differ from the physical real, should demand for the former outweigh that of the latter. He elaborated:
“Banks may be allowed to tokenize deposits for use on a new intermediation platform, in conjunction with a CBDC, with programmable cash access and smart contract functionality” (CoinTelegraph Brasil)
The Digital Real is expected to go into testing in 2022 and full launch in 2024.
NFTs and Gaming
Brazil’s Ambev, the world’s largest beer producer, is rolling out an NFT of its Goose Island brand, which is the producer of Bourbon County Stout. Released only once per year and aged in bourbon whiskey barrels, Bourbon County Stout is regarded by enthusiasts as among the best beers in the world.
The limited edition sale of 100 Bourbon County NFTs began September 15, priced at R$180 (US$34) per unit. Purchasers will be able to claim their beer and turn their label into an NFT.
Guilherme de Almeida Aguiar, marketing manager for Goose Island, said:
"The arrival of Bourbon County is always highly anticipated annually. So, we wanted to announce this moment in a special way. NFTs have generated more and more interest in a period where the digital is becoming more and more united with the real. With this initiative, we bring to the beer lover all the familiar experiences that he already knows … and we also add to this moment an innovation within the brewing universe in the country, definitely making it an item worthy of a collector" (CoinTelegraph Brasil)
Latin America’s largest investment bank BTG Pactual is closely watching the growth of NFTs and play-to-earn gaming, though it doesn’t have a strategy mapped out at this point.
Nicholas Sacchi, head of research at BTG Digital Assets, explained in an interview with CoinTelegraph Brasil:
“BTG Pactual is following the evolution of this non-fungible tokens market closely and believes that there is room for the development of initiatives related to this universe, but this is not part of the institution's short-term strategy.”
On the subject of play-to-earn game tokens, he explained:
“Before, players accessed games just for fun. Now, the decision is also about investment. The market is quite heated and it is important to be careful with game tokens, as this market is still very embryonic and therefore it is difficult to reach any conclusions about prices. But beyond a shadow of doubt, there is value to be captured in the industry.”
Car manufacturer Nissan is giving away custom NFTs with the purchase of its new Kicks Xplay SUV in Brazil. The company commissioned Fesq, a Brazilian artist, to design the NFTs - which will be distributed to buyers of the limited edition vehicle - of which 1,000 will be available for R$122,900 or US$23,250. The SUVs will be available for purchase beginning in October. (CoinTelegraph Brasil)
A group of Brazilian developers are launching Pandemic Politks, a CryptoPunks-inspired NFT collection aimed at highlighting government mistakes and overreach during the pandemic. 11,343 unique designs, created using Pixel Art, will be available for purchase on OpenSea with an initial price of 0.005 ETH. The NFT series was developed on Ethereum by the anonymous collective Krypto Politks and is one of the largest Brazilian NFT collections in existence, with new items being added weekly to the market. Developer and activist Samuel “Spike” Bogdan explained:
“We were looking for a a way to show that it’s possible to use new, emerging technologies to generate a social impact, even if only symbolic. Blockchain opened the doors to numerous possibilities that are just beginning to be explored - not just in the economic arena, but also in arts and politics.
The Pandemic Politks collection emerged as a fun way to disseminate these innovations to the Brazilian public and, at the same time, show the world some of the absurd situations caused by our political class over the last two years.” (CoinTelegraph Brasil)
Exchanges, Funds and Fintechs
Binance has launched the Brazilian version of its Law Enforcement Request System, which gives governments and regulators the ability to obtain information about citizens directly from the exchange. Law enforcement agents must submit an official request, including an official court order or police warrant, before using the service to gather potential evidence against a user. (Portal do Bitcoin)
Ripio has listed MANA, the native token of Decentraland - the Ethereum-native blockchain metaverse. The listing illustrates the growing popularity of NFT games in the Brazilian market.
Grupo Ripio CFO’s Bernando Teixeira explained in a statement:
“Ripio was one of the first in South America to list Axie Infinity tokens and also to facilitate the exchange of tokens for reais since then they are among the most traded. NFT games are all about Ripio's audience.
The universe of cryptocurrencies is expanding each day. Today, there are different currencies in the market that have proven to be good options for portfolio diversification. Our job is to follow these dynamics and enable our clients to explore the crypto world in the best way possible. The arrival of these new currencies, combined with the constant updates to our platform demonstrate that we are always ready to innovate.” (Portal do Bitcoin)
Chinese exchange Huobi is now has a fiat onramp in Brazil via a new partnership with digital bank Capitual. The service will allow Brazilian customers to exchange reais for cryptocurrencies using Capitual’s Quick Buy/Sell service.
Ciara Sun, Huobi’s vice president of capital markets, explained:
“The new channel will allow our Brazilian clients to deposit reais through the online platform instantly, which considerably reduces trading time.”
Binance also uses Capitual as a fiat onramp in Brazil. (Portal do Bitcoin)
Brazilian crypto hedge fund Fundo Bohr has been named most profitable quantitative arbitrage fund for the second quarter of 2021 by Crypto Fund Research. Fundo Bohr was up 12% during the period analyzed, despite bitcoin cratering by 41% in May.
The fund was established in June 2020 but only began distributing at the end of the year, with a minimum investment of R$10,000 (US$1890). Renato Ramalho, CEO of KPTL - which administrates the fund, explained:
"The Bohr Fund creates value thanks to strategies that exploit market inefficiencies and are linked to the high volatility of cryptoassets, with low exposure and correlation to the market. This is partly due to the very nature of cryptoassets, which have no fundamental value, which makes its price highly dependent on supply and demand.” (CoinTelegraph Brasil)
Softbank is launching a new fund with the goal of investing R$15bn (US$2.85bn) in Latin American startups. The fund will focus on companies invovled in artificial intelligence, digital finance, enterprise software and blockchain technology in the arenas of e-commerce, health and education.
Softbank is already one of the most prominent investors in the region. Of the 25 “unicorn” companies in the region valued at more than US$1bn, 15 have received investments from Softbank - including Mercado Bitcoin, Brazil’s largest cryptocurrency exchange. (CoinTelegraph Brasil)
Policy, Regulation and Law Enforcement
Congressman Expedito Ferreira Netto (PSD-RO) has introduced a bill in the Chamber of Deputies to regulate cryptocurrencies by categorizing them into three distinct criptofichas: asset-referenced cryptocurrencies, electronic currency cryptocurrencies and consumer cryptocurrencies.
Industry participants are less than thrilled with the proposal, which appears to have been drafted and introduced in a rather haphazard manner. Bruno Ramos de Souza, partner and legal director at Hashdex, explained to Portal do Bitcoin:
“If the proposal is approved in its current form, the law will be birthed with important problems.”
Pablo Cerdeira of Galdino and Coelho Advogados said that Netto’s proposal was a failed attempt to copy an earlier proposal out of the European Parliament:
When the European legislation referenced tokens, in Portugal Portuguese it was translated as ‘criptoficha’. But this does not work in Brazil and will create problems because no one uses this term here. It will certainly hurt more than it helps.”
CoinTelegraph Brasil also weighed in on Netto’s proposal:
“Netto demonstrated a total misunderstanding of the market despite having more than six years to study cryptoassets.”
The Ministério Público of the Federal District and Territories (MPDFT) is creating a working group to study cryptocurrencies, the evolution of digital assets and their implications for the legal field. The agency represents primarily Brasilia, the national capital. A memo released on September 17, laid out the group’s objectives - which include monitoring the development of the Digital Real and assessing its implications, and monitoring regulatory developments in the national Congress.
The group will be comprised of specialists in data protection, consumer protection, information technology and security, among others. Deputy Attorney General André Vinícius de Almeida explained:
“MPDFT was an important agent in the discussion of the General Data Protection Law and the Marco Civil. We were one of the first public ministries to create a unit dedicated exclusively to protecting Brazilians' personal data and privacy. Naturally, cryptoassets also come as points of attention for the institution.” (Portal do Bitcoin)
Rio de Janeiro authorities have uncovered a criminal network financed by cryptocurrencies as part of its Operation Batutinha crackdown. The syndicate specialized in selling drugs in upscale Rio neighborhoods using messaging apps such as WhatsApp. The police operation involved 18 arrest warrants and 31 search and seizure warrants.
The investigation revealed a sophisticated criminal network involving the acquisition, storage and distribution of drugs, and the use of cryptocurrencies to send and receive funds in an attempt to evade authorities. The gang also enjoyed the protection of several ex-policemen. (Portal do Bitcoin)
Military Police will auction off the R$150m (US$28m) worth of bitcoins seized from Glaidson Acácio dos Santos in August’s “Operation Kryptos”, which is considered the largest ever confiscation of cryptocurrency in Brazil.
Acácio dos Santos was the ringleader of the alleged GAS Consultoria pyramid scheme, which promised investors a 10% return per month but was not registered with the proper authorities. (CoinTelegraph Brasil)
On September 16th, GAS Consultoria released a statement saying that a court order had frozen $R38bn (US$7.2bn) in its accounts. The company responded by saying the amount was excessive and requested that a portion of the funds be unblocked so that it could make payments to contractors and creditors (Portal do Bitcoin)
On September 14, a Brazilian Supreme Court judge denied a second request to release Acácio dos Santos, citing concerns that he might be a flight risk and that he still might be able to hide the property being investigated across his various overseas accounts. (Portal do Bitcoin)
That’s all for this week! If you enjoyed this content, please share and subscribe!