🇧🇷 Brazil Crypto Report #5: Dogppers; Banco Central Debates Digital Real; Seleção Fan Tokens
🇧🇷 Brazil Crypto Report #5: Dogppers; Banco Central Debates Digital Real; Seleção Fan Tokens
Welcome to Brazil Crypto Report for the week of July 26-30, 2021, where we’re synthesizing the key crypto happenings in the southern hemisphere’s largest country.
This was a fun yet substantive news week. From Burger King Brazil jumping on the Dogecoin bandwagon with its ridiculous Dogpper promotion, to the Brazilian Central Bank’s steady plowing ahead on its digital real project, to the CVM announcing its intent to loosen accredited investor rules - there was something for everybody.
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 and read on👇
Brazilian Portuguese Lesson of the Week
How to pronounce ‘Banco Central’
Banco Central obviously means ‘central bank’. Since we look into the bank’s digital real plans a bit further down, here’s a quick primer on how to pronounce it like a local.
A couple quick, helpful Portuguese rules to introduce here:
If o is standalone or at the end of a word takes on the oo sound (ie spoon)
When the letter L is at the end of a word, it takes on a w sound (ie wow)
The second-to-last syllable normally carries the emphasis, but when L is final letter the emphasis will shift to final syllable
Put it all together and you get BAHN-koo sehn-TRAHW (with the w pronounced like final w in wow and not the final w in straw)
News Recap
Burger King Brazil Accepts Dogecoin for ‘Dogpper’ Dog Treats
In the latest instance of over-the-top Dogecoin market tactics, Burger King Brazil is rolling out a special edition ‘Dogpper’ dog snack and will accept payment for the treat in - you guessed it - Dogecoin.
Each Dogpper will have a fixed price of 3 DOGE, irrespective of the memecoin’s price volatility. It’s being billed as a way for dogs to enjoy Burger King delicacies in the same manner by which us humans are accustomed. The fast food chain stated, according to CoinTelegraph Brasil:
“This way, dogs no longer need to drool and look like a fool with a sad face while their owners delight,” adding "“What’s the best way to pay for a product specifically for dogs? With DOGECOINS, obviously."
This is so absurd that I can’t keep a straight face while writing this, but you have to applaud Burger King’s experimentation here. Any campaign that gets people using and spending crypto is ultimately a net a positive. If any Brazil-based readers actually purchase any Dogppers I would love to hear about your experience!
Nubank to Use Ripple Tech for International Money Transfers
Nubank announced a partnership with fintech company Remessa Online to give customers the ability to transfer funds overseas more quickly and cheaply using Ripple’s underlying payments technology.
The RippleNet network is connected to more than 200 banks and payment providers around the world. Remessa Online touts the Ripple network’s benefits as faster transactions - from two days to seconds - and reduced operations costs by as much as 50%.
A Remessa Online spokesperson explained, per Exame:
“We are working with Ripple to simplify international transfers in Brazil and offer an experience much faster, cheaper and more secure compared to the traditional banking system. Currently, we are active on xCurrent, one of Ripple’s products. Sending money out of the country has always been complicated, expensive and limited in terms of options. We want to revolutionize the financial market through the power of the blockchain.”
The service will be available to all of Nubank’s customers in the coming weeks.
“Nubank’s objective is to always offer the best possible client experience and deliver all of the necessary tools to hold their financial life in their hands,” explained a Nubank spokesperson.
Banco Central Debates Ideas for Digital Real, Though Rollout Remains Several Years Out
The Banco Central, Brazil’s Central Bank, commenced this week a seven-part series of virtual events exploring the costs and benefits of a Digital Real. During the inaugural session, João Manoel Pinho de Mello - a director at the Banco Central - emphasized that so-called central bank digital currencies will be integral in the transition to digital payments. He stated, as reported by CoinDesk:
“We understand that the use of CBDC will occur in situations where it is able to bring greater efficiency and transparency to transactions, whether from the retail perspective or its use by agents that make up the financial and payments industry.”
A Digital Real has been in the research and development phase for some time, though the Banco Central scaled back the effort in recent years to devote more attention to Pix, a real-time payment system launched in late 2020, and open banking initiatives - both of which are being touted as prerequisites to a potential CBDC.
BCB president Roberto Campos Neto stated a year ago that a Brazilian CBDC could be ready for launch by 2022. The bank pushed back that timeframe in June of this year, noting that the “conditions for the adoption of a Brazilian CBDC will be achieved in two to three years,” according to CoinDesk.
There were some other noteworthy ideas raised during the event, most notably by Robert Townsend - who serves as a professor at MIT and is involved in the Digital Dollar Project. Townsend advocated for building out a Digital Real platform that facilitates integrations between the Banco Central and the emerging digital economy of smart contracts, NFTs and decentralized finance.
Townsend said, per CoinTelegraph Brasil:
“You have a platform that belongs to the Central Bank, but the private sector can build on top of it, creating smart contracts that do not separate from this public platform, but do not overload it. With that, you delegate to the private sector a decentralized way of innovating, attracting customers and implementing new arrangements for the financial system.”
This type of arrangement would be most supportive of innovation in the economy, with both public and private money coexisting in their respective roles as long as it’s understood that the different assets will be priced and regulated differently.
Townsend also called for the establishment of a defi sandbox in Brazil using both stablecoins and a CBDC, whereby the CBDC plays the role of medium of exchange for the various private currencies.
João Manoel Pinho de Mello, another director at the Banco Central, emphasized that the discussion and eventual implementation of a Digital Real does not necessarily mean the end of physical money. Rather, he argued that the two would co-exist in a complementary manner to best address gaps in existing system, such as questions of financial inclusion.
Brazil Fan Token Pre-Sale Raises US$17m in 30 Minutes
So-called ‘fan tokens’ are in style. The Confederação Brasileira de Futebol (CBF) sold 30 million tokens to more than 13,000 buyers in a pre-sale this week.
CBF the organization that overseas football activities in the country, and most notably is the entity behind the seleção - or the Brazilian national team that competes in international tournaments like the World Cup.
The sale was hosted by the exchange Bitci, which serves as the provider behind fan tokens for other clubs in Spain, Scotland, Uruguay, Formula 1 and more, according to Exame.
The idea behind fan tokens is to stimulate engagement by giving token holders special benefits like access to exclusive events, products, giveaways and other experiences. However, the CBF has not disclosed what the benefits of its particular token will be.
The remaining 70 million tokens will be made available to the public on August 25, when they will be listed on the Bitci exchange under the ticker symbol BFT (Brazilian Football Team).
Bill in Brazilian Congress Proposes to Use Confiscated Crypto for Combating Cancer
A new proposal emerging out of Brazil’s Câmara dos Deputados aims to direct confiscated cryptoassets toward cancer research and related initiatives. Assets like bitcoin would be converted to reais and then transferred to the Ministry of Health.
Weliton Prado, a representative from the state of Minas Gerais, is the author of the proposal. Judging by his comments, he is not a fan of cryptocurrencies. According to the Câmara’s website:
“Cryptoassets have bitcoin as their most notorious representative,” said the author of the proposal, deputy Weliton Prado (Pros-MG). Due to their anonymity and the easy crossing of borders, Prado continued, they are used by criminals to transfer and launder money. “The seizures have been routine,” he said.
CVM to Open More Investments to Retail Investors, Including Crypto Funds
Comissão de Valores Mobiliários, Brazil’s securities regulator, is set to open up new types of higher risk investments to common investors.
Such investments had previously only been open to qualified investors who hold at least R$1m in total assets. According to CoinTelegraph Brasil, the move coincides with a rapidly growing class of retail investors in the country - which grew from 620,000 in 2017 to 4 million this year. Greater education among this investor class and the growing number of brokerages and platforms available to these investors were also cited among the motives.
The changes could be implemented within the next 18 months. Among the products potentially opened up to retail include ETFs with 100% exposure to cryptocurrencies. Currently, these funds - such as those offered by QR Capital and Vitreo - are restricted solely to accredited investors.
Did I miss anything? Have ideas for new content, topics or formats? Leave a note in the comments or hit me up on Linkedin, Twitter or Telegram at @AaronStanley. Thanks for reading!
Até mais,
Aaron