#163: Wen BRICS Bucks? Apparently Not Anytime Soon
Plus: Campos Neto talks tokenization at IMF/World Bank meetings; Hashdex BITH11 bitcoin ETF surpasses R$1 billion in AUM
Olá pessoal!
Welcome back to 🇧🇷Brazil Crypto Report for the week of October 21-25. 2024.
Lots of BRICS news to dive into this week, but first I’d like to flag that I’ll be in Buenos Aires next week for my first ever LaBitConf. Feel free to shoot me a note if you’ll be around and want to meet up IRL.
Also be sure to stop by this Filecoin x Zondax event that I’m cohosting on Oct 30. Would be awesome to see some of you there!
Additionally, make sure you register for ABCripto’s Criptorama 2024 event on Nov 19-20 in Sao Paulo before tickets run out!
🔎 What’s in this week’s BCR?
Hashdex’s BITH11 ETF surpasses R$1 billion in AUM
Trexx is finalist in Visa startup competition
Campos Neto talks tokenization and Open Finance at IMF/World Bank meetings
New Bitso Brasil CEO Espir lays out vision for Brazil market
Thanks for reading and have a great week!
-AWS
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This week’s interview is with Saul Hudson, who is a former executive with Reuters in Latin America turned crypto PR sage. Saul is a fascinating character who, in addition to having the same name as the Guns ‘n Roses lead guitarist, spent his career covering Latin America as a journalist, editor and executive before discovering cryptocurrency.
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BRICS payment system takes shape; BRICS currency
The BRICS Summit took place last week in Kazan, Russia — notably without the presence of Brazilian president Lula, and the big agenda item was a SWIFT alternative payment method touted by Russian president Vladimir Putin.
Putin noted that the countries had agreed, at least in principle, to work toward this alternative that would potentially incorporate digital assets and distributed ledger technology into countries’ payment systems as a means of counterbalancing the dominance of the US dollar.
He said, per the FT:
“We are not rejecting or fighting the dollar. But if we are not given the chance to use it, what can we do? We are then forced to look for alternatives.”
‘BRICS Pay’, or ‘BRICS Bridge’ would work similar to SWIFT but is designed to facilitate payments among member countries without relying on Western-controlled financial institutions. It would also aim to promote the use of national digital currencies for trade and investment.
If this system were to be adopted, it could mean that countries will be able to settle investment payments using cryptocurrencies like bitcoin and stablecoins — a significant change in how the bloc plans to handle cross-border payment flows.
The long-speculated BRICS shared currency, which would be backed by gold and a basket of member country currencies, will not be released anytime soon, however. The idea was initially floated last year. Putin explained:
“As for the common BRICS currency, we are not considering this issue at the moment; it is not mature. We must be very careful; we need to act gradually, without rushing in this regard.”
Jim O’Neill, the former Goldman Sachs economist who coined the term ‘BRICS’ in 2001, told Reuters that the proposed currency and payment alternative doesn’t pose a threat to dollar hegemony.
"The idea that BRICS could become a genuine global economic club is obviously a bit fanciful, as is the G7, and it is very worrying that they see themselves as some sort of global alternative, because that is clearly unfeasible.”
"I will take BRICS seriously when there are signs that the two countries that really matter – China and India – are actually trying to reach an agreement, instead of effectively confronting each other all the time.”
Other BRICS summit highlights:
Russian bitcoin miner and data center operator BitRiver announced that it is partnering with the Russian Direct Investment Fund to build mining and AI computing facilities across BRICS nations
BRICS participants are reportedly pushing a new strategy that involves Russian bitcoin miners selling coins internationally to bypass sanctions
Putting it all together — it’s hard not to conclude that BRICS countries are getting closer to seeing their time in the sun. I’ve long criticized the bloc as more adept at making noise and finger pointing than putting forth serious proposals. But it’s been a movement 20+ years in the works and global trends are finally working in their favor, so it’s getting tougher to write them off.
As Noelle Acheson, author of the Crypto is Macro Now newsletter, puts it:
“Against a backdrop of political chaos in the US and weakening UK influence, the BRICS summit is sending an image of relative coordination and expansion.”
CoinTelegraph Brasil BeinCrypto Forbes Financial Times
Hashdex’s BITH11 ETF surpasses R$1 billion in AUM
The crypto asset manager’s bitcoin ETF, which trades on Brazil’s B3 stock exchange, surpassed R$1 billion (US175 million) in total assets under management.
CEO Marcelo Sampaio said in a statement:
“This new milestone for the company reflects the maturation of the cryptoasset market in Brazil and investors' confidence in our ability to deliver innovative, high-performance solutions. We will remain committed to consolidating ourselves as a reference in the sector, offering products that combine security, transparency and diversified exposure to the global crypto market.”
Hashdex’s flagship HASH11 ETF was the first crypto ETF in Brazil to surpass the $1 billion threshold. It is now the second largest ETF trading in Brazil with more than 120,000 shareholders.
The company Hashdex is now the third largest ETF manager in Brazil.
CoinTelegraph Brasil Portal do Bitcoin BeinCrypto
Trexx is finalist in Visa startup competition
Trexx, the Web3 gaming startup founded by Heloisa Passos, is one of five finalists in the Visa Everywhere Initiative 2024 — a competition that tries to solve payments challenges around the world.
Prizes include investment in their startups, and the opportunity to partner with Visa and its customers.
Trexx is a financial protocol designed for gamers — offering credit, asset management and marketplace functionalities. She explained:
“The idea is that products such as prepaid card settlement with game assets, data analysis for service and credit offers, and integrated payment gateway for purchases within the loyalty platform and marketplace, can use the Visa ecosystem after the competition.”
CoinTelegraph Brasil Portal do Bitcoin BlockNews BlockTrends
Campos Neto talks tokenization and Open Finance at IMF/World Bank meetings
Central Bank president Roberto Campos Neto spoke on a panel about tokenization and programmable platforms in Washington, DC during the IMF/World Bank annual meetings.
He emphasized that it’s important to understand the building blocks — instant, programmable payments, open finance and tokenization — that, when combined “explore the capacity to have this financial marketplace in a single environment”.
He also discussed Drex, the bank’s CBDC project, and the concept of tokenization in the context of bank balance sheets:
“When you insert the concept of tokenization in bank balance sheets, banks will slowly move from looking at the balance sheets on an account basis to looking at them on a ‘token’ basis, and we think this is very efficient and productive. Tokens are better for banks to manage risks, manage guarantees, funding...”
New Bitso Brasil CEO Espir lays out vision for Brazil market
Barbara Espir, the recently appointed CEO of Bitso Brasil, spoke about her plans for leading the exchange in the country.
Her goals include providing more financial education and increasing the number of female clients using Bitso’s retail platform.
She also discussed Bitso’s heightened focus on institutional and B2B clients, noting that there has been an uptick in demand for these services:
"We haven't stopped serving, giving importance to retail, but we must continue with products for institutional clients, whether for local and cross-border payments with crypto and also building this bridge between crypto and the traditional exchange market.”
She will also put more effort into engaging Bitso’s community in Brazil, particularly given the movements by other international exchanges in the country:
"Coinbase and Crypto.com, these international brokerages, still have a very small market share here and limited products. Bitso has always wanted to position itself in Brazil as a local company. We have been here for over two years and have over 100 employees. We report our operations to the Federal Revenue Service. We consider ourselves a local company and I don't think we have any conflicts with international exchanges yet.”
Espir also explained that Bitso isn’t concerned about the Drex project potentially cannibalizing the stablecoin market. “These are two complementary technologies. Drex is wholesale, more for banks and payment institutions."
🗞Brazil Crypto News Rundown
📈 Markets
Mercado Livre’s Meli Dollar stablecoin has reached millions of users less than two months after launching. Ignacio Estivariz, ML’s vice president of fintech services, said that said that Brazilians are using the coin via Mercado Pago to make purchases and store as savings. He explained:
"People are using this cryptocurrency for purchases, cash withdrawals and as a way to protect their purchasing power.” (CoinTelegraph Brasil) (BeinCrypto)
Polygon is partnering with Agrotoken to boost agricultural RWA token adoption in Brazil. Agrotoken plans to launch its Natural Resources Chain on Polygon PoS. The chain will be used for tokenizing agricultural commodities such as soybeans and grains, financing platforms using tokenized assets as collateral, and blockchain-based sustainability certification and traceability. (CoinTelegraph Brasil) (BeinCrypto)
Vortx QR Tokenizadora appointed Flavio Scarpelli as CEO. He has worked at Vortx since its founding in 2016. He said in a statement:
“Vórtx is a company that I have been able to contribute to since its inception. Our expertise in the financial market, combined with the boldness of tokenization, puts us in a unique position to revolutionize access to investments in Brazil.” (Valor)
Exchange Digitra.com announced a US$1 million investment from 4Equity Media Ventures. It will be used to expand operations in Brazil and promote the DGTA token. (CoinTelegraph Brasil)
Some in the Brazil market are concerned that access to banking services for crypto companies in the country remains precarious. There are also concerns that banks that are now offering crypto brokerage services to their customers have a competitive interest to not provide banking services to potential competitors. Denise Cinelli, COO of CryptoMKT explained:
"This constitutes unfair competition, where financial institutions are taking advantage of their influence to dominate the sector.” (CoinTelegraph Brasil)
Pix adoption should boost Brazil’s GDP by R$280.7 billion (US$49 billion) by 2028, says the Economic Impact and Financial Inclusion Report issued by ACI Worldwide. (CoinTelegraph Brasil)
Itaú plans to launch AI 'super app' with 'hyper-personalized' experiences for customers. CEO Milton Maluhy Filho said the app would offer "a complete banking experience in a single context, using data and AI to offer more solutions tailored to their needs." (CoinTelegraph Brasil)
Nuclea and tokenization company Zuvia are partnering to offer tokenized duplicates using Nuclea Chain. Zuvia CEO Dangelo Machado said in a statement:
“The partnership with Núclea is a milestone for Zuvia and its clients, as it further expands access to safe and innovative investments. We are opening doors for Brazilian investors to participate in a previously restricted market, with the security of a robust infrastructure and the transparency that tokenization allows.” (BlockNews)
Rodrigo Borges of Carvalho e Borges Advogados explains the current landscape of tokenization in Brazilian credit markets in a MIT Technology Review column.
📲 Adoption
Bitcoin and other decentralized currencies serve as the benchmark by which Brazil’s Central Bank is developing Drex, and that bitcoin will always serve as a means of competition against state-developed digital curencies. Fabio Araujo, Drex coordinator at the bank, explained, in a podcast interview with BlockTrends:
“I think it is impossible for anyone to ban the use of Bitcoin. If the government, the Central Bank, or whoever it may be, offers a service that does not meet the population’s needs, the population will use something else.”
Araujo also explained that a potential single BRICS currency would face fiscal alignment challenges among the member countries, similar to what the Eurozone countries faced in the Euro’s early days. This would be a challenge given the vast differences of the economies involved. He said:
“The economic cycles of China, Russia and India are very different from those of Brazil.” (BlockTrends)
The eNations platform looks to unite the world of eSports, football clubs and gaming in Brazil via blockchain-based financing. Clubs like Flamengo, Sport Recife and Vasco are already part of the project, with other names in the pipeline. CEO Thiago Buozzi said:
“eNations was created to break the monopoly of big players and allow teams and players of different levels to have real opportunities for success. We are creating a structure where everyone can compete on equal terms.” (BlockTrends)
SmartPay, the company behind Swapix and the Truther app, has launched a personalized Pix key that allows customers to receive payments in the cryptocurrency of their choice — such as an automatic conversion from BRL to USDT. (CoinTelegraph Brasil)
The Ethereum Developer Pack is coming to Brazil with an intensive course on Solidity and Web3 as part of a joint initiative by EthKipu and ERC55. (CoinTelegraph Brasil) (BlockNews) (BlockTrends)
OKX is rolling out its OKX Race Club activation in partnership with McLaren Racing. The experience will take place from October 31 - November 3, 2024 in Sao Paulo and will feature interactive activities like racing simulators and exclusive gifts. Among the attractions is the MP4/5B car used by Ayrton Senna in his 1990 world championship. (CoinTelegraph Brasil) (BeinCrypto)
35% of AI applications implemented in Brazil are “high risk” according to guidelines outlined in draft legislation to regulate AI, a study by ITS-Rio finds. The report also found that the five main sectors adopting AI in Brazil are health, agribusiness, education, finance and banking, and judiciary. (CoinTelegraph Brasil)
SertãoBlock looks to bring traceability via blockchain for rural producers in Brazil’s northeast region. (CoinTelegraph Brasil) (Livecoins)
The government of Minas Gerais is testing a health data interoperability system that uses blockchain. (CoinTelegraph Brasil)
Florianopolis was chosen to host the global premier of The Network State, a documentary film about the Próspera decentralized society, which is on an island off the coast of Honduras. Brazilian producer and entrepreneur Jean Hansen was among the core team that produced the film. (BeinCrypto)
🏛 Policy, Regulation and Enforcement
Apparent cryptocurrency pyramid Beefund is forcing investors to accept its own cryptocurrency instead of receiving payout via Pix or other cryptos like USDT. The news comes as hundreds of customers are complaining about the lack of support for withdrawals. In a note to clients, Beefund said that investor funds available on the platform would be converted and paid out in a new currency called BEEB 2.0 tokens.
“This ensures that your assets are protected and continue to grow in the new ecosystem. In addition, you can withdraw your funds through the exchange at any time.” (Livecoins)
Three partners of Fiji Solutions, considered a rival to collapsed crypto pyramid scheme Braiscompany, were sentenced to a combined 39 years in prison. (Portal do Bitcoin)
Some Brazilian jurists are arguing that Drex raises concerns of excessive centralization and state control, thus compromising individual privacy rights. (BeinCrypto)
Public prosecutors from across Brazil will meet in Rio de Janeiro on October 27-29 to discuss how to solve crimes related to artificial intelligence, in addition to other topics. (CoinTelegraph Brasil)
The Brazilian Institute of Responsible Gaming is rolling out the use of facial recognition tests for online sports betting platforms. (CoinTelegraph Brasil)
A group of eight associations representing copyright released a letter warning against unauthorized AI music creation in Brazil. (CoinTelegraph Brasil)
The CVM and Fenasbac signed a technical cooperation agreement to support the CVM’s regulatory sandbox initiative. The CVM plans to migrate its experimental laboratories to the environment of Fenasbac’s Financial Innovation Lab. (BlockNews)
Brazil’s National Data Protection Authority announced that it will summon representatives of X for clarifications related to the impacts of the platform’s use of data collection for AI training. (CoinTelegraph Brasil)
Federal Police launched Operation Criptojacking with the goal of finding those responsible for a cyber attack against the National Health Surveillance Agency and using the system for mining cryptocurrency. (Portal do Bitcoin) (CriptoFacil) (Exame) (BeinCrypto) (Livecoins)
Hackers invaded the Instagram account of former BBB contestant Fernanda Bande to promote a cryptocurrency scam. (Portal do Bitcoin)