🇧🇷 Brazil Crypto Report #26: Feliz Ano Novo Edition 🎉
👋 Olá pessoal, Feliz Ano Novo and seja bem-vindo to 🇧🇷 Brazil Crypto Report for the week of December 27-31, 2021.
I hope everyone had a merry, enjoyable and restful holiday season. The highlight of mine came on New Year’s Day when I took my brother-in-law and nephew to the coldest-ever outdoor NHL hockey game. Game-time temperature was -10°F/-23°C. It was a bit of a different experience than New Year’s Day 2021 when I was getting a gringo sunburn in Brasilia.
At any rate, 2022 is set to be another exciting year for crypto in Brazil and we’ll be here every step of the journey. I’d like to give a special welcome to the many new subscribers who have joined over the last couple of weeks. We’re glad to have you as a reader.
It was an expectedly slow news week but we all know that Brazil never sleeps so read on to catch up on the highlights. We’re also preparing a special Year in Review/Year Ahead edition of BCR that will come out in the next day or two, so watch out for that as well.
Also, while not specifically Brazil-related, I wanted to highlight the news that Mexico will introduce its own central bank digital currency in 2024. This timeline corresponds to the planned rollout of the Digital Real in Brazil. It’s hardly insignificant that the Latam region’s two largest economies are aggressively developing CBDCs, so this is a critical theme to watch as we head into 2022.
If you aren’t up to speed on the Eth:Rio event taking place March 14-17 you can jump in the Telegram group here.
Até mais,
Aaron
🙏 Special thanks to NEAR Foundation for supporting Brazil Crypto Report!
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 English-speaking audience.
💣 Trending Cryptos in Brazil
Each week we highlight in this section the top 10 trending cryptocurrencies in Brazil, using data from CoinGecko from January 4.
🏆 Bomber Coin takes the #1 crown for the second consecutive week, followed by CryptoCars, Zodiacs, CryptoPlanes, Baby Doge Coin and Binance Coin.
📺 Mainstream Media Conversation
In this new section we document Brazilian mainstream media coverage of cryptocurrency
Valor Econômico, Brazil’s primary economics and finance media outlet, ran an end-of-year story looking at the explosive growth of NFTs in 2021 and a prognosis for 2022. It quotes Mercado Bitcoin’s Fabricio Tota:
"There was a flurry of ideas about NFTs in 2021 and this brought much more concrete cases than a simple euphoria for the topic. Many companies wondered what they could create with NFTs. At Mercado Bitcoin, for example, we made three investments in this area. In other words, due to the diversity of offerings, NFTs were a good opportunity to diversify investments.”
Valor Econômico columnist Marcelo d’Agosto highlighted the growing interest in cryptocurrencies among large financial institutions.
With a US$2.1bn valuation, Mercado Bitcoin joined a cohort of nine other Brazilian companies to achieve “unicorn” status in 2021. Mainstream outlets Folha de S. Paulo and InfoMoney highlighted the 10 unicorns in end-of-year coverage. MB founder Gustavo Chamati told Folha in an interview:
"We join a class of companies that are no longer bets, but have already consolidated, even though they are growing fast.”
InfoMoney wrote an in-depth Portuguese language profile of Binance founder and CEO Changpang Zhao, aka “CZ”.
🗞Brazil Crypto News Rundown 🗞
📈 Markets
Mercado Bitcoin does not plan to go public in 2022 or 2023, founder Gustavo Chamati said in an interview with Folha de S. Paulo. He also confirmed rumors that the exchange was considering a public offering in 2021, but ultimately opted for a private investment round led by Softbank that brought the firm’s valuation to US$2.1bn. MB is using the funds to build out its international expansion, first into Mexico and then into Argentina, Chile and eventually Europe.
Chamati gave further color on the decision to pass on the public markets:
"We…talked about the possibility of an IPO this year, but we ended up opting for the private round (...) I think the market still doesn't understand what the crypto-asset industry is. Coinbase, listed in the US, continues growing quarter-on-quarter, but stocks still fluctuate depending on the price of bitcoin, not what the company is delivering. I'd say it's not on the horizon for at least the next two years.” (CoinTelegraph Brasil)
cBRL, the BRL-pegged stablecoin was discontinued on December 31 after being acquired by Transfero, the issuer of the more popular BRZ real-paired stablecoin. A statement from cBRL, which first launched the coin in 2020, explained:
"The deal comes with the goal of consolidating the stablecoin market in Brazil and enabling greater access for Brazilians to the global cryptoasset market." (CoinTimes) (Portal do Bitcoin)
Federal Deputy Kim Kataguiri said in a social media AMA session he believes that central banks have lost control of their currencies, but bitcoin is a “risky” alternative. He said:
"I think that the central banks basically lost track - the US central bank, the Brazilian central bank have lost the backing of the currency and this generates a loss of confidence and a loss of purchasing power, but I don't know if adopting bitcoin is the the best way out, the best alternative”. (CoinTimes)
Bisq, a decentralized exchange, reports that its BRL-denominated trading volume doubled in 2021. (Livecoins)
Brazil’s Ibovespa, the country’s primary stock index, finished 2021 down 12% for the year, marking the third-worst performance in the world ahead of Hong Kong and Venezuela. (CoinTelegraph Brasil) (Blocknews)
🚀Adoption
97% of Brazilians are familiar with a cryptocurrencies, according to a new study by Visa, the global payments network called "The Crypto Phenomenon: Consumer Attitudes & Usage." Of all the markets surveyed, Brazil had the highest percentage of curious adults (29%) who view crypto positively and are prepared to enter the market - making it the most prepared to grow.
The report also found that engaged Brazilian consumers are highly interested in buying even more cryptocurrencies for investment purposes in the next 12 months and believe that cryptocurrencies will be widely used to buy products and send money in the next 5 to 10 years. (CoinTelegraph Brasil)
The Brazilian Central Bank has approved the development of an over-the-counter trading desk project using blockchain tech for its innovation sandbox. The idea behind the OTC Exchange is that the processes of registering and settling transactions for the purchase and sale of assets are represented in digital form and written to a blockchain network, ensuring transparency and regulatory compliance for all participants. (CoinTelegraph Brasil)
Crypto wallet Bitfy is making a free course available for taxpayers who wish to declare their digital assets. The Receita Federal, the Brazilian tax authority, began mandating in 2019 that citizens pay income and capital gains derived from cryptocurrency. (CoinTelegraph Brasil)
Federal University of Juiz de Fora is hiring two new professors, and to qualify candidates must pass a test focusing on blockchain, cryptocurrencies and smart contracts. (Portal do Bitcoin)
Brazilians will be able to pay for property in Miami with bitcoin and other cryptocurrencies via a new partnership between Elite International Realty and São Paulo-based Unblock Capital. (CoinTelegraph Brasil)
Even, the São Paulo-headquartered construction company and real estate developer, announced the sale of two apartments fully paid for in bitcoin via a partnership with Mercado Bitcoin. The purchase was approximately 4 BTC, which represented ~R$1m at the time of the transaction. (CoinTelegraph Brasil)
Educational records for all Brazilian students will be registered using blockchain technology beginning in 2022 through a new Ministry of Education program called Jornada do Estudante. (CoinTelegraph Brasil)
Mercado Bitcoin and Blockchain Academy are launching a new course designed to help new investors learn about bitcoin and other cryptocurrencies. (CoinTelegraph Brasil)
🎮 NFTs, Gaming and Metaverse
Monark, co-host of the popular Flow Podcast announced his involvement in a new play-to-earn cryptocurrency gaming project that is expected to launch in mid-2022. With 3.6m YouTube subscribers, Flow is one of Brazil’s most popular podcast brands. (Livecoins)
🏛 Public Policy and Enforcement
President Jair Bolsonaro and his counterparts from the other Mercosur countries formally recognized the potential of blockchain technology agreed to expand use of the technology to benefit constituents. The communique was signed at a Mercosur summit meeting in December among representatives from Argentina, Paraguay and Uruguay. The document highlights:
“They considered that blockchain networks can play an important role in fostering innovation, improving citizen services and anti-fraud measures, and agreed on the advisability of jointly exploring the use of this technology for the exchange of information” (CoinTelegraph Brasil)
Cabo Frio-based RC Consultoria e Tecnologia has reportedly defaulted on clients who purchased bitcoin investment contracts with 13% monthly return. The company claims that its accounts were blocked after the arrest of Glaidson Acacio dos Santos of GAS Consultoria last year. The two firms’ offices were located in proximity to one another. (Portal do Bitcoin)
The Comissão de Valores Mobiliários, Brazil’s securities regulatory, approved yet another asset tokenization proposal. Start Me Up Crowdfunding Sistemas (SMU) will operate within the CVM’s regulatory sandbox to build a product for tokenizing and offering to the public shares of startup companies. CVM said in a statement:
"With the development of the project, SMU hopes to enable secondary trading in the crowdfunding market, aiming to provide liquidity to investments in innovative businesses, contributing to the development of the capital market for small businesses.” (CoinTelegraph Brasil)
AC Consultoria e Gestão, an investment firm, is under investigation in the state of Rio de Janeiro for allegedly operating a cryptocurrency pyramid scheme. (Livecoins)
Reports of another bitcoin pyramid scheme are emerging out of Rio Grande do Sul. The investment firm Bitcoin Brasil reportedly has suspended payments to clients after promising 60% monthly returns. (Livecoins)
Maricá, a city in the Rio de Janeiro metropolitan area, is lowering the taxes levied on “green cryptocurrencies” and other environmental protection initiatives. It will reduce the tax rate to 2% for companies that provide services such as "digital operating platforms, including environmental assets, fintechs, startups providing these services, in addition to fund administration and management activities that fall into this area of activity”. A statement from the city explained:
"The objective of the taxation model is to encourage organizations that own these products to settle in the city, injecting new technologies to make Maricá a reference in encouraging green projects, those whose purpose is to offer positive impacts to the environment." (Portal do Bitcoin)
Johann Steynberg, an alleged South African bitcoin pyramid scheme operator, was found and arrested in Goiânia by Interpol on December 29. Steynberg was the CEO of Mirror Trading International, a firm that promised returns of 10% per month through the use of AI and advanced trading software. (Portal do Bitcoin)