🇧🇷BCR #50: PicPay to Enable Crypto Purchases for 30 Million Users; Itaú to Launch Tokenization Arm
Also, crypto legislation stuck in a stalemate in Brazil; more Binance/Capitual drama
Fala pessoal!
Welcome to 🇧🇷Brazil Crypto Report for the week of July 11-15. I’ll be off on holiday next week but I’ve got a super fun podcast episode coming out on Tuesday so be sure to check that out when it drops 👊
-AWS
😕 No Vote This Week on Crypto Legislation
The Marco Cripto didn’t get a vote in the Chamber of Deputies this week, meaning that it almost certainly won’t be brought to the floor until after the October elections. The Chamber is off for a two week recess until early August, but with campaign season looming it appears likely that the legislation will see further consideration before then. Proponents of the bill, however, are still calling for a vote sooner than later. Bernardo Srur, director of ABCripto, which represents exchanges, said in a statement:
“ABCripto understands that it is necessary to approve the Bill as soon as possible, including the highlights that are related to the maintenance of articles related to the transition rule and asset segregation.”
🤑PicPay to Launch Crypto Exchange Product
Brazilian fintech giant PicPay will open crypto purchases for its 30 million active customers beginning in August, and it believes it will have 3 million customers using crypto via its platform in 12 months. Here’s what you need to know:
PicPay customers will initially be able to trade bitcoin, Ethereum and USDP (Pax Dollar), and if all goes according to plan, there will be 100 coins available by the end of 2022.
PicPay becomes the latest Brazilian fintech app to offer this service to its customers, following closely behind Nubank, Mercado Pago and rideshare startup 99Pay.
Portal do Bitcoin reports that Paxos, which also works with Nubank and Mercado Pago, is the likely underlying service provider.
The take rate will vary from BRL 0.39 to 1.2% of the transaction.
The firm also intends to launch an NFT brokerage.
The goal is to enable users to not just invest funds, but also to pay everyday items such as boletos, bills and PIX using crypto.
Anderson Chamon, PicPay co-founder and vice president of products and technology emphasized to NeoFeed that the crypto product offering is not a gimmick, but rather that:
“Picpay will enter this world very strongly. It will not be an accessory product, it will be a very important line of business.”
PicPay will also look to create its own Real-pegged stablecoin called Brazilian Real Coin to compete with BRZ. Chamon commented:
“there is still no robust real-backed stablecoin, and PicPay will be the big sponsor of that…you will not need to be a PicPay user to use this stablecoin. You can be a tourist coming to Brazil, take Paypal or another digital wallet, buy BRC on an exchange and use it in the Brazilian market.”
🏛Itaú to Launch Asset Tokenization Platform
Itaú Unibanco, the largest private bank in Brazil, announced plans to launch Itaú Digital Assets - a private tokenization platform for transforming finance products into crypto tokens. It will also maintain a crypto custody service platform.
The new division will be led by Vanessa Fernandes, who argues that the “tokenization-as-a-service” initiative will bring more stability for investors and lower issuance costs for issuers. She explained at a press conference:
“The platform will carry out both the issuance, distribution and custody of crypto-assets (tokens) as well as integration with other Itaú products and channels.”
The platform, which is built on Hyperledger Besu, has been in development and testing for 18 months and it has tested a tokenized receivables product with a company and chain of suppliers, moving R$360,000 via the pilot operation. Fernandes explained:
“This was the first test we carried out. Now we are going to connect our tokenization products with other Itaú platforms and then we will launch new products in the sector. Tokenizing assets will be part of Itaú's portfolio in search of democratizing assets for retail and that before were restricted to wholesale investors.”
The product will be available for institutional clients initially and retail later in the year.
Earlier this year, Itaú also invested in Brazilian asset tokenization startup Liqi.
New Twists in Binance/Capitual Drama
New reporting this week shows that the Banco Central issued a warning to Acesso - parent company to Capitual and a company in the Méliuz group - regarding its relationship with Binance and the associated high risk of money laundering.
Critically, the regulator demanded detailed information about Binance clients, specifically that it be able to individually identify each Binance customer in Brazil, according to a report from Folha de S. Paulo last week. Binance denied having been notified, though it ultimately opted to switch payment providers - dropping Capitual, the financial arm of Acesso, in favor of Latam Gateway - which works with Banco BS2.
In a statement sent to Portal do Bitcoin, Binance said that it:
“it is not a customer of Acesso and has never been informed of any request from the Central Bank for individualization of accounts.”
A new report from Portal do Bitcoin released on Friday shows that the Banco Central has been seeking individualized customer data from Binance since at least March.
Binance and Capitual/Acesso then entered into litigation amid the pressure from BC, Folha reports, with Binance accusing Capitual of trying to steal its customers by requesting unnecessary information, and Capitual/Acesso lobbing money laundering allegations against the broker.
The report asserts BC claims that Binance moved R$40bn (US$7.4bn) in 2021 without Acesso, the regulated institution, having any control or knowledge of who the customers were and whether the origin of funds was lawful. One of these individuals was allegedly “Pharaoh of Bitcoins” Glaidson Acácio dos Santos, operator of the GAS Consultoria pyramid scheme.
🎙Be sure to check out the latest episodes of the 🇧🇷Brazil Crypto Report podcast. This week I sat down with Sabrina Tachdjian, head of payments and fintech at HBAR Foundation to discuss the HBAR grants program, what types of projects in Latam they are looking to seed, and what a successful application looks like.
🔥Also check out my conversation last week with Arthur Mining CEO Ray Nasser discussing his thesis of Brazil as a dark horse play for bitcoin miners.
🤩 We’ll also be launching our invitation-only BCR Institutional platform later this month. This product will focus on providing bitcoin and crypto education to professional investors in Brazil. It will consist of investor-focused content (in Portuguese), exclusive monthly roundtables and discussion groups. Please keep an eye on your inbox for an invitation. If you don’t get an invitation but feel you should (many of you use anonymous email addresses🕵️♀️) feel free to ping me at aaron@brazilcrypto.report.
🙏 Thanks to our partners at HBAR Foundation for supporting 🇧🇷 Brazil Crypto Report! If you're a Latam entrepreneur or developer with an up-and-coming project or idea and need some support, take a look at the HBAR grant program. They're seeding projects focused on DeFi, fintech, NFTs, sustainability and so much more. They also offer a plethora of other resources to help builders bootstrap. Do yourself a favor and check them out! 👊
🗞Brazil Crypto News Rundown
📈 Markets
Brazil has the second most users of DeFi applications of any country in the world, according to a survey released by Metamask. It trails only the United States. (InfoMoney)
Brazilians transacted R$15.4bn (US$2.84bn) worth of crypto in 2 million transactions in May, according to data from the Receita Federal - which collects data from individuals, legal entities and brokers. Roughly 39% of unique individuals transacted during the month, 39% less than May 2021. (Valor Investe)
Mercado Bitcoin founder Rodrigo Batista recently announced the launch of his new exchange Digitra.com, which will pay users in the DGTA token to trade on the exchange. (CoinTelegraph Brasil)
Singapore-based exchange Phemex saw a fourfold increase in trading volumes out of Brazil in Q2 of 2022 compared to the same period in 2021. (CoinTelegraph Brasil)
Transactions using the BRZ stablecoin, issued by Transfero, tripled year-over-year during the period of January to April. Safiri Felix, director of products and partnerships at Transfero, stated:
“BRZ is following the path for which it was designed, that is, to expand trading alternatives for Brazilian investors and connect the local market with global exchanges.” (BlockNews)
MB Tokens is partnering with asset manager FIDD to tokenize credit rights investment funds that represent assets and receivables. (Mercado Bitcoin)
Gate.io, the eight largest crypto exchange in the world, has hired André Sprone as its Brazil country director. He joined the firm from Easy Crypto. (BlockNews)
Exame published a piece looking at what a crypto exchange or CeFi platform bankruptcy in Brazil would mean for investors. TLDR is there isn’t much recourse for depositors.
Renowned Brazilian investor Luiz Barsi, aka the “Brazilian Warren Buffet”, yet again criticized cryptocurrencies as “pure fantasy”. He told Reuters in an interview:
“Cryptocurrencies have no basis, it's a fantasy. The guy who invests in cryptocurrencies wants a quick and easy profit, something that doesn't exist in reality. He is an easy-going citizen who enjoys fantasy…Whoever invests will lose. It's a matter of time.” (BeinCripto)
📱Adoption
Foxbit Pay is integrating the Lightning Network to enable instant bitcoin transactions, with the benefit of reducing bureaucracy and minimizing credit and debit card costs incurred by large and small merchants. (CoinTelegraph Brasil)
The Banco Central’s LIFT lab is hosting a free online course focused on decentralized finance.
Valor Investe ran a helpful article highlighting the developing asset tokenization space in Brazil.
Brazilian exchange Coinext will tokenize music rights for artists Gusttavo Lma, Luan Santana and Marília Mendonça. Each token holder will receive a percentage for each public performance of any song. (CoinTelegraph Brasil)
Valor has a good piece looking at the adoption (or lack thereof) for crypto in payments in Brazil.
Brazilian model and reality TV star Liziane Gutierrez lost R$430k (US$79k) in the Celsius bankruptcy. (Livecoins)
Brazil’s first cryptocurrency-themed hamburger restaurant has opened in Porto Alegre. (CoinTelegraph Brasil)
Tracing and tracking the origin of gold mined in Brazil using blockchain tech could help Brazilian authorities quell the illegal gold trade, says a new report from Instituto Escolhas. (CoinTelegraph Brasil)
Febraban, the Brazilian federation of banks, will host an event focused on NFTs, CBDCs, the Digital Real and the metaverse. Febraban Tech will take place August 9-11 at Bienal de São Paulo. (CoinTelegraph Brasil)
Premium Gaucho beef from Rio Grande do Sul will now be registered and tracked via blockchain. (Livecoins)
A report from Cryptos Research highlighted the most influential crypto news websites in Brazil, with Money Times, Portal do Bitcoin and Criptonizando rounding out the top 3.
Brazilian bitcoiner Mauricio Cessere established the first full Bitcoin satellite node in Brazil via the Blockstream Satellite Network - which allows people in remote and hard to reach areas to run nodes. (CoinTelegraph Brasil)
🎮 NFTs, Gaming and Metaverse
Rastra, a Brazilian startup with a supply chain tracking project using digital identities issued as NFTs, is one of 20 finalists in the Santander X Global Challenge. (CoinTelegraph Brasil)
Itaú Cultural is seeking metaverse content creators for a program seeking to promote Brazilian culture and Web3. (Livecoins)
Inkapsula, a new record label linked to the world of NFTs, launched this week on an unofficial launch of the reality TV show “La Casa de Bitcoin”. (BlockNews)
The city of São Paulo invested in an NFT platform called Cardume Preto via a startup accelerator program. (Livecoins)
Brazilian neuropsychologist Deibson Silva is creating a metaverse to archive and store individual memories. (CoinTelegraph Brasil)
Former Atlético Mineiro footballer Reinaldo is launching his own line of NFTs with the support of International Digital Group. (CoinTelegraph Brasil)
Volkswagen is launching a new NFT collection to commemorate the 50th anniversary of the SP2, a classic Brazilian car. (CoinTelegraph Brasil)
DaX, a Brazilian NFT startup, is partnering with Easy Live to allow users to create and curate NFTs and fan tokens on the platform. (CoinTelegraph Brasil)
Lagoinha Baptist Church hosted a church service in the AltspaceVR metaverse allowing people to attend in the virtual via avatars and donate via QR codes. (CoinTelegraph Brasil)
🏛 Public Policy, Regulation and Enforcement
“Bitcoin Sheik” Francis Silva denied rumors that he intends to flee Brazil and has promised to pay all outstanding debts to customers of Rental Coins, an alleged bitcoin pyramid scheme that promised fixed monthly returns of up to 10%. (CoinTelegraph Brasil)
Mirelis Diaz, spouse of GAS Consultoria founder and “Pharaoh of Bitcoins” Glaidson Acacio dos Santos, accused Universal Church of orchestrating GAS’s downfall in a new YouTube video. She accused the Assembly of God church of racism and suggested that the success of GAS was met with envy by Universal pastors who didn’t want Glaidson to prosper. (Portal do Bitcoin)
Luxury cars and other goods seized from “Bitcoin King” Claudio Oliveira will be auctioned online on July 22. Among the items listed include a Lamborghini, BMW and Honda Touring, along with several luxury handbags. (Money Time)
Federal Police seized cryptocurrencies in Governador Valadares, a city in Minas Gerais, in a raid known as Operation Trinta Reis. The case involves a local group accused of smuggling people into the US illegally via Mexico and then used cryptocurrencies to hide the profits. (Livecoins) (Portal do Bitcoin)
Investment company BitExcell is accused by investors of defaulting on its promise 4% monthly returns delivered via crypto trading bots. (Livecoins)
The city of Itapemirim in Espirito Santo was the victim of a ransomware attack in which the hacker demanded R$250 million in bitcoin. (Livecoins)