π§π· Brazil Crypto Report Special Edition: 2021 Top 10 Most Influential + 2022 Year Ahead π₯π₯π₯
π OlΓ‘ pessoa! Happy New Year and welcome to this special edition of π§π· Brazil Crypto Report.
The turn of the new year in crypto means itβs time for Top 10 lists, retroactive looks and year-ahead predictions galore about prices, the state of adoption, etc.
So in this edition we unveil our inaugural list of the Top 10 Most Influential people in Brazil crypto for 2021, highlight 10 critical narratives to watch for in 2022 and examine some other predictions for the year to come.
The objective with these lists is to showcase the individuals and themes that most effectively capture the Brazilian crypto zeitgeist. Narrowing them down is always a challenge and there are inevitably people and topics that deserve to be there but donβt make it, but these are the results that we felt most effectively capture the spirit of the times.
π£ Also, Iβd like to take this opportunity to introduce Thiago Borges, the newest contributor to π§π· Brazil Crypto Report. Thiago is a Brasilia-based reporter who covers politics and economics out of the nationβs capital. He is going to be helping out BCR during his sabbatical period this spring. Hereβs a welcome note from Thiago:
βMy name is Thiago Borges. And I'm very excited to be part of the Brazil Crypto Report team. I graduated in Journalism and I've been covering economy and politics for more than 10 years. I hope to contribute to the dissemination of the advance of cryptocurrencies in Brazil and to your knowledge about the crypto world.β
Thiago will be assisting with the news rundowns and will be helping us to understand the Brazilian crypto scene through the political and macroeconomic lens. He also helped put together the content for this year-end edition. You can connect with him on Linkedin here.
πͺ Weβll be looking to continue expanding our network of contributors throughout 2022, including Portuguese language content. If you know someone whoβd be interested please have them ping aaron@brazilcrypto.report.
Before we dive in, here are a couple of other Brazil crypto year-in-review resources if youβre interested
Mercado Bitcoin published this 15 page year-in-review report highlighting the main crypto developments of 2021
Exame published a list of 2022 predictions from seven Brazil crypto experts including Safiri Felix and Lucas Xisto of Transfero, Bernardo Brites of Trace Finance, Ricardo Dantas of Foxbit, Lucas Schoch of Bitfy and more
US exchange Coinbase published in December a report entitled βWhere Next for Crypto in Latin America?β that looks at the Brazilian market along with Mexico and Argentina.
π Special thanks to NEAR Foundation for supporting π§π· Brazil Crypto Report!
If youβre new here, the meta-thesisΒ 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.
BCRβs 2021 Top 10 Most Influential
Fernando Ulrich - Economist and Educator
Ulrich is an Austrian School economist who has been the primary bitcoin spokesman out of Brazil since the early days. He wrote the first book in Portuguese about Bitcoin called "Bitcoin - A Moeda na Era Digitalβ (Bitcoin - The Currency in the Digital Age), which was published by the Mises Institute in 2014. He has more than 120k followers on Twitter and his Portuguese language YouTube channel focused on bitcoin, crypto and economics has 401k subscribers.
FΓ‘bio AraΓΊjo - Banco Central do Brasil
AraΓΊjo is the mastermind behind the Banco Centralβs Digital Real design and implementation strategy, which is the among the most unique and innovative central bank digital currency projects in the world. The economic advisor also serves as the primary spokesman for the project, which is expected to launch in 2024.
Deputy Aureo Ribeiro - CΓ’mara dos Deputados
Ribeiro is the author and champion of the cryptocurrency regulation bill that passed in Brazilβs Chamber of Deputies in late 2021. While not without its critics, the law would bring greater legal clarity to the asset class and businesses that offer crypto services in the Brazilian market. It would also ratchet up penalties for scams, golpes and pyramid schemes involving cryptocurrencies. Ribeiro is a businessman who represents Rio de Janeiro.
Gustavo Chamati - Mercado Bitcoin
Chamati is the co-founder of Mercado Bitcoin and board member at 2TM. Mercado Bitcoin put together a massive 2021 on multiple fronts - funding, valuation, trading volume, customer acquisition, etc. It has established itself as Brazilβs premier homegrown crypto exchange and became the countryβs first crypto unicorn in 2021.
Marcelo Sampaio and Fernando Carvalho - HashDex and QR Capital
Sampaio and Carvalho are the champions of Brazilβs booming crypto ETF scene. Both firms launched bitcoin and ethereum ETFs for trading on Brazilβs B3 exchange in 2021, and Hashdex successfully listed its crypto index ETF as well. The funds proved to be immensely popular among Brazilian investors and were generally the best-performing of any publicly available investment products in the market. This all happened in a year when the Ibovespa index was down 12% and countries like the US STILL have yet to approve a bitcoin spot ETF (though we did manage to get a bitcoin futures ETF π).
Glaidson AcΓ‘cio dos Santos - GAS Consultoria
Heβs probably not the type of guy you want on a list like this but heβs undeniably been influential this year. Glaidson - aka the βPharaoh of Bitcoinsβ - is a partner at GAS Consultoria Bitcoin who is accused of running a bitcoin pyramid scheme out of Cabo Frio, a town outside Rio de Janeiro that has become known as βLittle Egyptβ due to the abundance of cryptocurrency pyramid schemes in the region. Glaidson was arrested in August in βOperation Kryptosβ, which saw Federal Police seize US$29m worth of bitcoin, US$3m in cash, 21 luxury vehicles and a host of other luxury goods in what has been reported to be the largest ever cryptocurrency seizure in Brazil. Glaidson denies having committed wrongdoing and says he has been unjustly persecuted and had his financial accounts frozen.
Carol Souza and KakΓ‘ FurlanΒ - UseCripto
Souza and Furlan have become two of the top crypto influencers in Brazil. They produce daily content on UseCripto's social networks aimed at exposing the Portuguese-speaking world to theΒ importance of cryptocurrencies in financial education. They now have 116k followers on Instagram, 121k subscribers on YouTube.
Andre Portilho - BTG Pactual
Portilho is Head of Digital Assets & Partner at BTG Pactual, Latamβs largest investment bank, where he has been the driving force behind the bankβs embrace of crypto assets and blockchain tech in recent years - making BTG the first major financial institution in the country to directly participate in the crypto markets. He is currently the head of Mynt, the bank's new crypto-asset investment platform aimed at retail investors.
Daniel Vogel - Bitso
Daniel Vogel is CEO of Mexico-based Bitso, Latin America's first crypto unicorn and the largest crypto exchange in the region. Initially focused on Spanish-speaking countries, Vogel made the Brazilian market his primary focus in 2021 by relocating to SΓ£o Paulo, staffing up aggressively in Brazil and repeatedly proclaiming his intention to go βall inβ on Brazil. Bitso began servicing customers in Brazil in 2021 and even inked a sponsorship deal with SΓ£o Paulo Football Club.
Safiri Felix - TransferoΒ Swiss
Felix is a cryptocurrency entrepreneur who serves as director of products and partnerships at Transfero Swiss AG, the Swiss-Brazilian company responsible for issuing BRZ, a stablecoin paired to the Brazilian real. In November, Transfero announced the launch of a platform for the direct purchase and sale of crypto-assets and it acquired cBRL, a competing BRL-pegged stablecoin, late last year.
Top 10 Brazil Crypto Themes to Watch for 2022
Crypto Regulation Bills in Congress
With the passage of the Aureo Ribeiro bill in the Chamber of Deputies last year, the focus now shifts to the Senate, where Senator IrajΓ‘ Abreu of Tocantins is the lead rapporteur for the companion legislation. The passage of comprehensive crypto regulation that provides legal certainty to businesses and operators without crippling innovation would be a major breakthrough, but with these types of projects the devil is always in the details, as they say. Will crypto legislation get drowned out amid competing priorities? Will the final text be supportive of growth and competition or will it be a tool for state capture by incumbents?
Digital Real Testing and Implementation
The Banco Central Bank is working quickly towards creating a digital CBDC version of the real. With the digitalized version, it will be possible to perform transactions, payments and exchange through a virtual environment regulated by the Central Bank of Brazil. The Banco Central has begun looping in stakeholders and potential vendors into the design and implementation, and consumers are expected to be included in the testing by 2023. This is obviously βuncharted territoryβ as they say, so the themes we will be following include:
Can such a complex project be delivered by 2024?
How will the success of Pix translate into adoption of a Digital Real?
The Banco Central has been forward-thinking in its goal to interoperate the Digital Real with other public blockchains? Will it continue to embrace this openness approach or will it revert to a closed, walled garden model like other countries are doing?
What concerns, ie privacy, will the Brazilian public have about this system?
Mercado Bitcoin versus the World
A meta-theme of this publication is the coming showdown between homegrown Mercado Bitcoin and international giants like Binance, FTX, Bitso, Coinbase, Gemini and others who have established a foothold in the Brazilian market or are planning to do so soon. We expect this to continue playing out on multiple fronts in 2022.
2022 Elections
Brazilβs presidential election is scheduled for October 2, 2022. The charismatic-yet-controversial Trumpian incumbent president Jair Bolsonaro will likely match up against Lula, the revered (by some) former president who was recently released from prison. Given these dynamics, itβs pretty safe to guarantee that there are going to be a lot of political fireworks across Brazil for the next 9 months (and maybe longer). Brazil is not for beginners, as the saying goes. This is likely to translate into volatility across financial markets, irrespective of either candidateβs specific views on cryptocurrency.
Further down the ballot, the 2022 elections will hopefully give rise to new leaders, ideas and agendas that can help create a political environment conducive to pro-innovation policies and market-oriented solutions that can help crypto ecosystems and related technologies unleash their potential in the country.
In this light, weβll be keeping an eye on Partido Novo, which is a Brazilian liberal party that has defended the pro-market agenda in the National Congress. The party defends cryptocurrencies and has criticized the legislative proposals on the subject that have emerged Congress because it believes that the state does not need to regulate this market. This shows some of the difficulties in regulating crypto in the country. One of the party leaders is Marcel Van Hattem, who has something of an Andrew Yang vibe - heβs young, thinks outside the boundary lines of traditional political parties, supports innovation and market solutions.
Fan tokens and NFTs in the Football Context
Anybody reading this understands that NFTs will be a key theme to watch in 2022, so we wonβt bore you with general prognostication here. But we are quite interested in this intersection of NFTs and football as a means of driving new engagement and strengthening the relationships between fans, players and clubs.
How βfan tokensβ play into this equation will be fun to watch as well. 2021 was the year that so-called βfan tokensβ arrived on the national football scene, with nearly every major Brazilian club launching a token or planning to do so. How popular will these tokens be? Will they be seen by consumers as an investment or as a βutility tokenβ? Is there enough utility to these tokens to warrant their existence or are they simply money grabbing schemes employed by clubs to squeeze more money out of fans?
CoinTelegraph Brasil has a nice write up on the Brazilian fan token explosion of 2021 if youβre interested in learning more.
Will Crypto Investments Outpace Traditional Equities Like in 2021?Β
To no oneβs surprise, crypto was the best-performing investment in the Brazilian market last year. The competition wasnβt exactly formidable, however. According to a survey by Economatica, bitcoinβs profitability was 76% for the year, which was comfortably above 9.26% inflation. By comparison, savings accounts yielded just 3.05%, while the Ibovespa - the countryβs leading equities index - was down 12% on the year.
In 2022, there is an expectation of volatility in traditional investments because of the presidential campaign between Jair Bolsonaro and Lula. Will crypto-assets have a strong enough performance to attract more investors than traditional investments?
Will Crypto Be Used as a Payments and Financial Inclusion Vehicle in 2022?
The Banco Central has explained that it views crypto as an investment asset rather than a currency because most Brazilians who buy it view it as an investment asset rather than a currency. Cryptoβs original promise, however, is that of providing peer-to-peer payments services, especially to underbanked populations that lack sufficient access to traditional financial services.
2021 saw a growing number of Brazilian companies accepting cryptocurrency payments and even a proposed bill in Congress that would allow for employees to receive salaries in crypto. However, there are some potential legal impediments - some specialists say that the Consolidation of Labor Laws stipulates that all salaries must be paid in official currency, i.e. the real.
One could argue that the rapid adoption of fintech projects like Nubank and Pix means that crypto financial inclusion is less of a priority because itβs being already being addressed. Still, crypto projects like Celo that are focused on financial inclusion are also expanding their ecosystems across Brazil, so this will be an area to watch.
Mass Adoption
Brazil has a population of 214 million tech-savvy people. More than 108m are believed to use Whatsapp. More than 40m are Nubank clients. But just 10m million are estimated to have used cryptocurrency. It is a market that still has a lot to grow. Will 2022 be the year Brazilian consumers start buying and using cryptocurrencies en masse? How much of this will depend on regulation? Will volatility prove attractive or a deterrent?
CVM and Banco Central Sandbox Crypto Projects - Can They Succeed?
Brazilian financial regulators have established innovative innovation sandbox schemes and have approved several intriguing asset tokenization and tokenized security projects for development in these frameworks. The big question will be to what extent the projects that are incubated in these sandboxes can gain real world traction and adoption once they graduate.
Carbon Credit TokensΒ
Another trend that could be strong in 2022 is the growth of carbon credit tokens, such as MOSS (MCO2). People and companies are increasingly committed to environmental conservation, so nothing could be more natural than investing in a token backed by a carbon credit used to offset greenhouse gases.Β MCO2 has earned listings on large US exchanges, and major Brazilian companies, airlines and football clubs have begun using these tokens to offset their carbon emissions.
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