🇧🇷 Brazil Crypto Report #20: BRL Stablecoin Consolidation

👋 Hello everyone,

Welcome to 🇧🇷 Brazil Crypto Report #20 for the week of Nov 8-12. Lots of news this week to catch up on, but before we jump in I’d like to extend a big thanks to Celo Community Fund for a financial grant supporting this newsletter.

It’s crazy to step back and realize that this is already the 20th edition of this newsletter.

I spun it up during the summer on a whim after returning to the US from a six month stint in Brasilia. I’d had the urge to experiment with self-publishing for a while, but couldn’t identify a niche. I wanted something where a) I had sufficient knowledge, b) I was personally interested in writing about it, and c) I would provide real value for readers (ie it wasn’t being already done by somebody else).

The lightbulb moment arrived and I realized that an English language Brazil crypto newsletter checked all the boxes. It was apparent after a couple months living in Brazil that this country will soon be one of the biggest and important crypto markets in the world, and the crazy part was that basically nobody in the Western/English-speaking crypto space was even talking about it.

So I’d like to use this 20 week milestone to evaluate where I take this moving ahead. I’m encouraged to see that readers are finding it useful, and I want to continue experimenting with new ways to create value. If you can spare three minutes, I invite you to take this reader survey.

The overarching goal here is to provide a comprehensive and reliable English language information source about the Brazil crypto ecosystem. In that sense, I like to think of this product more as a public good than an income stream. That said, I’ll need additional financial resources to expand beyond the current offering (bringing on help with news aggregation, producing a podcast).

So I’ve begun to think a bit about monetization options both in the traditional subscriber/sponsor sense but also the Web3 sense - NFTs, social tokens, DAOs, etc. I want to go about this in a way that still disseminates information far and wide so would greatly appreciate reader feedback here.

🚀 Onto this week’s news:

1️⃣ Mercado Bitcoin records R$4.4bn in October trading volume and announces new partnerships around solar energy and tokenized receivables

2️⃣. Binance is in some hot water for reportedly using a fake phone number and email address to register with Brazil’s tax authority

3️⃣. Transfero, the issuer of the BRZ stablecoin is purchasing cBRL - a competing BRL pegged stablecoin

4️⃣ Crypto.com credit cards are coming to Brazil via a partnership with Visa

5️⃣. Carbon credit tokenization platform Moss has transfered R$100m worth of its MCO2 token to sustainability projects in the Amazon

6️⃣. Pyramid schemes, pyramid schemes and more pyramid schemes

Also, if anybody is attending LaBitConf in El Salvador this week I’d be excited to hear about your experience.

Thanks for reading and have a great week,

Aaron

🙏 Special thanks to Celo Community Fund for supporting Brazil Crypto Report!

Celo is hosting its DeFi Para o Brasil hackathon from November 15-21 as part of its global DeFi for the People campaign. 25,000 cUSD in prizes will be awarded to winning teams.

Areas of focus include DeFi, NFT, gaming, environmental sustainability, infrastructure and Web3, interoperability, financial inclusion and social entrepreneurship and more.

DeFi for the People is a collective comprised of Celo, Aave, SushiSwap, Curve, 0x, PoolTogether and others that is devoted to supporting DeFi educational and cultural initiatives around the world.

👩‍💻Brazil Crypto Hiring Spotlight

Bitso is looking to fill five Brazil-specific job openings: Marketing Director, Senior Legal Associate, Nvio Operations Manager, Recruitment Marketing Specialist and Communications Lead.

Coinbase now has 16 roles specific to Brazil. These range from product and engineering to risk & fraud prevention and business development

Ripple is seeking a business development manager out of its São Paulo office.

For Portuguese readers, CoinTelegraph Brasil has a handy run-down of different Brazil crypto related jobs here.

🗞Brazil Crypto News Rundown 🗞

📈 Markets

• Cryptocurrency inflows into Brazil fell by 20% in September from August as the market cooled down, per data from the Brazilian Central Bank obtained by Portal do Bitcoin. September saw US$401m in inflows, down from US$496m in August. The all-time high was realized in May of this year with US$756m.

  Because there is no significant cryptocurrency mining activity in Brazil, every crypto purchase is effectively an import. This has prompted the Banco Central to closely track how crypto purchases are impacting the country’s balance of payments.

• Mercado Bitcoin registered R$4.4bn (US$822m) in trading volume for the month of October, a 40% increase over September. BTC and ETH made up 21% and 10% of the total volume, respectively. MB’s Fabricio Tota said the surge was due in part to news that the US Securities and Exchange Commission approved two bitcoin futures ETFs after several years of anticipation. (MoneyTimes)

• $MENGO, the ‘fan token’ of the Flamengo football club, surged 25% after being listed on Mercado Bitcoin. It is the third Brazilian fan token to be listed on MB, alongside Atlético Mineiro and Corinthians. (Portal do Bitcoin) (CoinTelegraph Brasil)

• Binance has removed fees for customers withdrawing funds in BRL via a partnership with Capitual, a bank. Users still have the option of withdrawing by traditional bank transfer with a fee of R$2.60 per transaction. (Livecoins)

  Binance @binance

  Zero withdrawal fees for $BRL via CapAccount. ➡️ binance.com/en/support/ann…

  

• Mercado Bitcoin is getting into the renewable energy space with plans to launch tokens backed by solar energy through a partnership with Comerc, one of Brazil’s main energy retailers. Initially, two types of tokens will be released: the first one will provide “cashback” to solar energy generators and launch in January; the second will be backed by certificate notarizing that the electricity comes from renewable sources. Matheus Nogueira, CEO of Mori - the firm responsible for Comerc’s energy generation assets, said:

“The token can be treated like any other currency, but it has an additional benefit: it is a token that represents renewable generation.” (CoinTelegraph Brasil)

• Transfero, issuer of the BRZ stablecoin, announced the acquisition of cBRL - another stablecoin pegged to the BRL. The move aims to consolidate the BRL stablecoin market and provide Brazilian customers with more access to global crypto markets. Transfero CEO Thiago Cesar explained:

“Today there are more than 10,000 cryptocurrencies and tokens in the world and a good portion of these are not directly available to the Brazilian user. We created BRZ to reduce the friction and provide more access to the global cryptoasset market. The acquisition of cBRL looks to unite the Brazilian cryptoasset community.” (CoinTelegraph Brasil)

• Nubank is looking to raise US$3bn though its initial public offering December 8 on the New York Stock Exchange, with trading to begin the following day. The initial estimated share price is US$10-US$11. Nubank shares will trade on Brazil’s B3 exchange through the “Brazilian Depository Receipt” mechanism at an initial price of R$9.35 - R$10.29. (CoinTelegraph Brasil)

• NovaDax listed six new cryptoassets aimed at blockchain gaming and decentralized finance users: The Sandbox (SAND), Smooth Love Potion (SLP), Illuvium (ILV), NEAR Protocol (NEAR), Zcash (ZEC) and Terra (LUNA). (CoinTelegraph Brasil)

• Giant Steps, a quant fund, is launching a new product that will initially trade BTC and ETH futures contracts, and eventually add in other crypto assets. Giant Satoshi, as the fund is known, will be the first Brazilian crypto fund to benchmark in bitcoin, meaning that it must deliver returns above and beyond the bitcoin spot price. The minimum initial investment is R$500k (US$91k), and the fund will charge a 2% annual administrative fee and a 20% performance fee.

  Giant Steps CEO Flavio Terni explained to Valor Economico that the fund’s goal is to capitalize on crypto market volatility while shielding investors from downturns:

“We are talking about a market that is still in its maturation phase, with well-defined tendencies both upwards and downwards. Here at Giant, we have experience generating returns in times of high volatility. We see this volatility as an attractive feature in that it generates opportunities, for example, for strategies such as trend-following or market-making.” (CoinTelegraph Brasil)

• 2TM, the parent company of Mercado Bitcoin, led a R$90m (US$16.5m) investment round in to CERC, the first registry specializing in receivables to be authorized to operate by the Banco Central. A portion of the funds will be devoted to building solutions for digital asset markets while bringing more scale and security to tokenized asset markets. (BlockNews)

🚀Adoption

• Crypto.com credit cards are coming to Brazil through a new partnership with credit card giant Visa. Through the agreement, Crypto.com becomes a “principal member” in Visa’s network in Brazil, meaning it will be able to directly issue its credit cards in the country.

  Cardholders will be able to convert cryptoassets directly to BRL and use for payment wherever Visa is accepted. The card also offers up to 8% cashback on purchases (paid in CRO - Crypto.com’s native token), as well as reimbursements for Spotify, Netflix and Amazon Prime subscriptions.

  Crypto.com CEO Kris Marszalek said in a statement that “Brazil is an important market for Crypto.com, and we will continue to bring our products and services to cryptocurrency users in Brazil.” Eduardo Abreu, VP of New Business at Visa Brasil, added:

“It’s no surprise that Brazil was the first country in Latin America. We know the “appetite” of Brazilians for innovation and we will work together to create new consumer experiences in the crypto ecosystem, and with the convenience and security of Visa cards.” (CoinTelegraph Brasil) (InfoMoney)

• CoinTimes put together a handy list of five crypto-friendly credit and debit cards that can be used to spend crypto and earn cash-back in crypto. The cards are issued by Alter, Crypto.com, Novadax, UzzoPay and ZroBank.

• Moss, the Brazil-based carbon credit tokenization platform, has now transferred more than R$100m (US$18.5m) to Amazon rainforest preservation and sustainability projects. The payments have been made using the project’s native Ethereum-based MC02 token. When the token is burned on the Moss platform by its owner, Moss guarantees the offsetting of a ton of carbon emissions.

  The platform has seen significant demand this year as interest in emissions offsetting grows. It has enlisted more than 200 corporate partners such as GOL Linhas Aéreas, C6 Bank, iFood, AMARO, PagSeguro PagBank and more. (Exame)

• August 23 could soon be known as Cryptocurrency Traders’ Day in the city of São Paulo, per a proposal by Alessandro Guedes, a municipal Workers’ Party leader. (Livecoins)

• Coritiba Foot Ball Club sold 33k worth of its Piás do Couto tokens in an initial sale, raising R$585k (US$108k). The token represents a basket of rights to the team’s players, and token holders are compensated anytime a player trained by Coritiba switches teams per FIFA’s Solidarity Mechanism. Daniel Coquieri, CEO of the asset tokenization platform Liqi - which hosted the sale, said:

“The tokenization investment market is still new for many people in football, but little by little it has been gaining ground and revolutionizing the relationship between the club, fans and investments.” (CoinTelegraph Brasil)

• Zro Bank is looking to bring large corporations, startups and financial institutions into the digital asset world through its new and unprecedented “crypto-as-a-service” product, with some large B2B partnership announcements expected in the coming weeks. Cazou Vilela, Zro Bank CMO said:

“We understand that we can, one more time, lead the market movement and become the primary infrastructure and liquidity provider for different companies that want to align their businesses with the crypto universe. This time, it’s not just the financial markets, but practically every area of the economy. This is highly scalable.” (CoinTelegraph Brasil)

• Digital bank Capitual continued its expansion into digital assets, making nine new cryptocurrencies available to its retail customers via its new mobile app. (CoinTelegraph Brasil)

• Tokenization startup BlockBR is launching with a goal of bringing 100,000 clients and R$45m (US$18m) worth of tokenized assets onto its platform in its first year. (CoinTelegraph Brasil)

• Flapz, the helicopter and private jet rentals service known as “Uber for Millionaires”, is now accepting payment in bitcoin and other cryptos. Flapz more than 500 aircraft, including helicopters and private jets, in its network that can be rented for flights in Brazil and elsewhere in Latin America. (CoinTelegraph Brasil)

• Brazil’s National Institute of Information Technology is now officially using blockchain technology in the time stamp system used for official government documents. The agency will use a Hyperledger-based solution developed by Kryptus to certify the date and time of a document’s issuance. (CoinTelegraph Brasil)

🎮 NFTs and Gaming

• Brazilian exchange Coinext is giving away 30 scholarships to an Axie Infinity school through a partnership with Khal Special Forces, an NFT gaming and eSports group. Randomly selected winners will receive exclusive access to an Axie Infinity account and will be able to keep 45% of the tokens earned during their sessions. (CoinTimes)

• DUX Games, the largest provider of Axie Infinity scholarships in Brazil with more than 2,000 teams in operation, is expanding into Star Atlas. It has created the Brazilian StarAtlas Alliance guild, which has already enlisted 4,400 members. DUX Cripto, the holding company, was selected into the Beta Startup Program at Web Summit in Lisbon last week. DUX CEO Luiz Octávio Gonçalves Neto explained:

“Web Summit is the largest startup event in the world. To be approved into the Beta Startup Program is a very important step to consolidate crypto companies in the technology market and also to internationalize DUX.” (CoinTelegraph Brasil)

• Rayssa Leal, the 13 year-old Brazilian skateboarding phenom and youngest ever Brazilian to earn an Olympic medal, now has her own NFT. (CoinTelegraph Brasil)

  Mike Deodato, Jr. @mikedeodato

  Rayssa Leal, a nossa skatista, é super-heroína em NFT

  

  blogs.oglobo.globo.comRayssa Leal, a nossa skatista, é super-heroína em NFT | Ancelmo - O GloboRayssa Leal, que brilhou nas Olimpíadas de Tóquio 2020, agora tem uma NFT para chamar de sua. A arte digital criada pelo artista Mike Deodato está...

🏛 Policy, Regulation and Law Enforcement

• Binance CEO Changpeng Zhao (aka CZ) has reportedly been cited in a police inquiry into GAS Consultoria, an alleged cryptocurrency pyramid scheme that deposited $R1.2bn (US$222m) worth of investor funds onto the exchange.

  The inquiry asserts that CZ used a false name and email to register Binance in Brazil. According to a column by O Globo journalist Lauro Jardim, Binance registered with the Receita Federal, Brazil’s tax authority, using a non-existent phone number ((11) 1111-1111) and email address (aa@aa.com.br).

  The O Globo column also notes that the inquiry has threatened Binance’s relationships with fiat on-ramps in Brazil such as Méliuz, which recently purchased Acesso, a neobank. The company reportedly announced that it would cancel its contracts with Binance if the relationship brought on too much reputation risk. (CoinTelegraph Brasil)

  Mercado Bitcoin was quick to pounce on the news with a trollish tweet.

  Mercado Bitcoin @MercadoBitcoin

  Não sei se vocês viram a matéria do "O Globo" hoje, mas tem corretora cripto que se registrou no Brasil com e-mail e telefone falsos. Aqui no MB transparência e segurança estão em primeiro lugar. 8 anos de história, mais de R$ 50bi negociados. Vem com a gente! 😉

• Another supposed cryptocurrency pyramid scheme out of Cabo Frio has collapsed. Spartacus Consultoria, run by a former Military Police captain named Diogo Souza da Silveira, promised investors 14% returns through cryptocurrency trading. However, the entity recently announced an end to its operations, and investors are complaining that they have been unable to get their money returned. (O Dia)

• Federal Deputy Aureo Ribeiro highlighted the growing incidence of cryptocurrency scams and pyramid schemes, and the need for intervention by the National Congress, an op-ed for CoinTelegraph Brasil.

• The governor of the state of Paraíba, João Azevêdo, vetoed proposed legislation that would regulate cryptocurrencies in the state. He said that while the bill’s intentions are good, it would interfere in constitutional matters, a prerogative that belongs to the Congresso Nacional. (Portal do Bitcoin)

• Five accomplices of “Pharaoh of Bitcoins” Glaidson Acácio dos Santos have been hiding from Brazilian authorities in the Dominican Republic since August. According to a report by Extra, the individuals arrived at a luxury resort in the beach town of Punta Cana on August 23 for the launch of a GAS Consultoria compliance program. The following day Glaidson and other GAS Consultoria partners were arrested in Brazil. They have since remained in the beach town of Punta Cana, though arrest warrants have been issued for João Marcus Dumas and Vicente Gadelha Rocha Neto by a Rio de Janeiro court.

• GAS Consultoria released a video calling for the release of Glaidson Acácio dos Santos, the company’s founder who was arrested earlier this year and has had multiple habeas corpus petitions denied. The company’s attorneys argue that it Glaidson’s detention makes it difficult to settle and release funds to aggrieved customers, adding:

“The defense also emphasizes that in its opinion the arrest of Glaidson, in addition to being unnecessary, makes the task of seeking a consensual solution with the authorities much more difficult, given the known precarious conditions of communication that result from the prison situation.” (Portal do Bitcoin)

• Federal Police are cracking down on yet another alleged cryptocurrency pyramid scheme out of São Paulo that funneled R$100m (US$200m) over the last four years. The scheme promised investors 6% returns per month, which were paid out with deposits from new investors. Police confiscated several luxury vehicles, boats and aircraft, in addition to blocking of checking and cryptocurrency accounts. (CoinTelegraph Brasil)

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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!