🇧🇷BCR #55: What Winter? Mercado Coin Kicks Latam Adoption into Overdrive
🇧🇷BCR #55: What Winter? Mercado Coin Kicks Latam Adoption into Overdrive
BTG, XP unveil crypto platforms; Ripple inks partnership with Travelex Bank
Fala pessoal!
Greetings and welcome to 🇧🇷Brazil Crypto Report for the week of August 15-19, 2022. Quick FYI that I’ll be attending Blockchain Rio September 1-4 and Ethereum São Paul Sept 9-11.
I look forward to meeting readers at both of these events as well as connecting with new and old friends. If you’re attending either feel free to ping me at aaron@brazilcrypto.report or @AaronStanley on Telegram.
As always, I appreciate you reading and hope you enjoy this week’s edition.
-AWS
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BTC: 3FQ5Tz8S7o9tBxgj2j9T3LnqJFWuFaGYrt
ETH: 0x517bAEC8000FF2052f7B0BF56c5FDd9B6A5c69ab
🤯 Mercado Libre Rolls Out Mercado Coin in Brazil
Mercado Libre (Mercado Livre in Portuguese), the largest e-commerce firm in Latam, is launching its own cryptocurrency. Mercado Coin will serve as a loyalty token that can be earned as cashback on purchases. Users will be able to use the coin to make additional purchases on the platform or exchange it into BR. The marketplace will add a “crypto logo” next to select products in the marketplace indicating that users will earn Mercado Coin rewards when purchasing those items.
The token will initially be available to 500,000 users with plans to expand to Mercado Libre’s 80 million Brazilian users by the end of August. The intent is to expand into other countries in the region “soon”.
Mercado Coin will be tradable on Mercado Pago at an initial price of 10 cents. Crypto exchange Ripio developed the technology behind the coin and will provide custody and trading services for the token on Mercado Pago. At present, no other exchanges will be listing the coin.
The coin itself is a standard ERC-20 Ethereum-based token, though users will not be able to transfer out to external wallets during the first stage of the rollout.
Mercado Libre Chief Technology Officer Daniel Rabinovich said in a statement.
"The blockchain technology supporting Mercado Coin allowed us to deliver a secure and open solution. We continue to follow the evolution of crypto and blockchain as we see significant potential in these technologies to simplify operations and empower our customers financially."
A Pymnts.com analysis notes that Mercado Coin appears to be more of a private digital currency rather than a cryptocurrency, noting similarities to Facebook Coin (which lasted from 2011-2013), JPM Coin or even Amazon rewards.
Not to be outdone, Nubank is also reported to be developing its own cryptocurrency which would supposedly go live in 2023, according to a report from Estado de Sao Paulo.
🏇 Retail race gets crowded as rivals XP and BTG Pactual hard launch crypto platforms
BTG Pactual, Latam’s largest investment bank, hard launched its Mynt platform this week. A crypto exchange for retail investors with a R$100 minimum investment, it offers Bitcoin, ether, Solana, Polkadot and Cardano for trading, with plans to list a BRL-paired stablecoin in the works.
Initial plans for the product were first unveiled last September and it was available to a select group beginning in early May before officially launching to the public on August 15. Mynt offers 24/7 live support for customers with questions and is available via smartphone app and desktop. The product carries an average trading fee of 0.5% and will also provide financial education and analysis content. Mynt will custody the assets.
BTG Pactual's Head of Digital Assets André Portilho commented:
"Crypto is a new technology with great potential for transformation, which brings risks and opportunities…We are promoting direct access to investments in the main cryptocurrencies on the market, in a simple and secure way, in a very intuitive and complete platform, with content and financial education.”
Meanwhile, XP executives rung the opening bell of the Nasdaq stock exchange in New York to commemorate the launch of its Xtage crypto product - which will make bitcoin and ether purchases available to customers. CEO Marcos Horie commented that the product came in response to “tons of requests” from customers looking to invest in crypto through XP’s platform.
XP’s Lucas Rabechini told Portal do Bitcoin that the platform aims to be “the best tool in terms of experience, scalability, latency and technology” on the market. Xtage uses Nasdaq’s underlying technology base which is fully integrated into the XP application.
The platform offers bitcoin and ether trading currently, with plans to have around 10 currencies available and 200,000 active crypto customers by the end of the year. It will charge a 0.60% transaction fee.
The product will also feature an integration with MetaTrader which will allow the use of proprietary trading algorithms and bots
💡 Does the entry of BTG, XP and other “TradFi” institutions into the market spell trouble for crypto exchanges in Brazil? InfoMoney’s Paulo Alves examines.
🍻Ripple launches “on-demand liquidity” service in Brazil
Ripple is bringing its on-demand liquidity offering (ODL) to Latin America for the first time via a partnership with Brazil’s Travelex Bank. ODL uses the XRP cryptocurrency to facilitate the transfer and exchange of fiat currencies between countries without the need to maintain pre-financed capital.
Travelex will initially use the ODL service for payments between Mexico and Brazil, though plans are in the works to extend the service to the US and Asia. Ripple has operated an office in Sao Paulo since 2019.
Ripple CEO Brad Garlinghouse highlighted the importance of Brazil, which sees US$780bn per year in inflows annually.
“Brazil is a key market for Ripple given its importance as an anchor to business in Latin America, its openness to crypto and country-wide initiatives that promote fintech innovation,”
Garlinghouse also praised Banco Central president Roberto Campos Neto’s forward stance on regulatory questions and Brazil’s posture toward financial innovation
“Recently, the president of the Brazilian BC commented that regulation has to support innovation. I think it's a positive sign of Brazil's position on financial technologies…Brazil is a very friendly market for technology. Customers here expect instant transactions because of the PIX. What we see is that this drives up global demand. If you transfer money instantly here, you'll want to do the same when sending out of the country.”
Travelex Group COO João Manuel Campanelli noted that through the partnership, Travelex will have access to liquidity 24 hours a day, seven days a week:
“The payments market is changing very quickly, in Brazil and abroad, and having a system like Ripple's guarantees us a faster settlement process”
🎙Be sure to check out the latest episodes of the 🇧🇷Brazil Crypto Report podcast.
This week I spoke with Guilherme Rebane who is head of Brazil and Latam at OSL - one of the largest liquidity providers and digital asset platforms for institutions.
I also chatted with Conor Brady who runs Ethereum Brasil about his upcoming Ethereum São Paulo event.
Also please don’t miss my conversation with Isac Costa, who is a former CVM regulator and a professor at Insper and IBMEC. We chatted for 90 minutes about every aspect of the crypto regulation bill that is being considered by the Brazilian Congress. If you looking to get smart fast on the Brazil crypto regulatory situation, make sure you carve out time to listen to this.
👩💻Job Spotlight
This week’s featured job opening is for a P2P Merchant Business Development Manager for Latam at OKX.
🗞Brazil Crypto News Rundown
📈 Markets
Kaszek Ventures, one of Latam’s largest venture capital firms, is eyeing more digital assets deals in the region. It previously invested in Bitso, Colombia’s Minka and Argentina’s Exactly Finance, and it recently made an investment into an undisclosed DeFi and crypto banking solutions company. Managing Director Hernan Kazah told The Block:
“That portfolio is still in the making, I’m sure we’re going to add at least one or two more )digital asset-focused investments)," Kaszek said in an interview. “When we go to fund six, the digital asset ecosystem will be more developed and we’ll be doing more things.”
Crypto exchange NovaDax has a new launchpad product called DAO Club that will allow users to invest in new cryptos before they are made available to the general public. CEO Beibei Liu told InfoMoney:
“We are a decentralized exchange, but we can partner with decentralized protocols, helping to educate the market. We are responsible for selecting the projects that are good and offering the product manufacturers to the user”, explains the executive. “What he wants is to know how to buy crypto at a discount.”
Crypto research house Mercurius will launch an actively-managed crypto fund in September called Mercurius Asset that will compete with the likes of QR Capital and Hashdex. The fund is registered with the CVM and Ambima and will be available to accredited investors. Gabriel Faria, founding partner and CEO of Mercurius Crypto, commented:
“We realized that today's managers are more focused on passive products, and we will focus 100% on active products, bringing our market intelligence to the crypto-assets sector.”
Crypto exchange BlueBenx declared itself to be a victim of a scam that resulted in the suspension of withdrawals and other operations. It says it has a team of 11 members working to restructure in order to honor obligations to 2,500 customers who were impacted, though refunds won’t be provided until 2023.
In a statement, the exchange said it was targeted by scammers in July posing as representatives of another exchange to discuss the listing of the BlueBenx’s Benx token.
Portal do Bitcoin reports that the supposedly stolen funds ended up on Binance.
The supposed representatives demanded a cash payment of US$200,000 and 25 million units of Benx to list the token. The representatives then carried out a series of transactions depleting reserve funds. It all sounds pretty absurd until you read this story about hackers creating a deepfake impersonation of a Binance executive and stealing tokens from developers and teams.
CEO Roberto Cardassi said in a statement:
“After payment and sending the tokens, security practice and validation common between operations, the fake representative of the institution captured the values and carried out thousands of transactions of liquidity withdrawals in the pools where the company kept its token listed on DeFi…This led to an outflow, in minutes, of all the liquidity of the assets invested in BlueBenx Finance, including the reserve funds in USDT (Tether).” (Valor Investe) (BlockNews)
The Receita Federal disclosed the top 10 coins by volume traded by Brazilians for the month of May. These include bitcoin, ethereum, tether, XRP, Cardano, Litecoin, Dogecoin, Solana, Chiliz and BRZ. (Valor Investe)
Liqi topped R$10m in total tokenized assets and has plans to reach R$60m by the end of the year. (CoinTelegraph Brasil)
Binance created two new companies in Brazil and became a partner in a third. Inclusive of B Fintech, the exchange now has four local companies with a direct connection to its CEO Changpeng Zhao. (Portal do Bitcoin)
Genial Investimentos is preparing to launch Vexter, its own cryptocurrency exchange in Brazil, in an attempt to compete with the likes of BTG and XP.
The platform is expected to go live by the end of October and offer 50 trading pairs to customers, including futures and options contracts aimed at more sophisticated traders
Genial currently manages Hashdex’s investment products and has roughly R$3bn in total assets under management
Genial is an investor in Mercado Bitcoin, Foxbit and FlowBTC. (CoinTelegraph Brasil)
The B3 exchange will use the Hashdex Nasdaq Bitcoin Reference Price index as the benchmark for its B3SAC3 bitcoin futures contract to be launched later this year. (CoinTelegraph Brasil) (InfoMoney)
BitPreço now allows the direct purchase of cryptos via Pix without having to create a purchase order on the platform’s order book. (Portal do Bitcoin)
Venture firm Fuse Capital began raising funds for its second fund which will focus on Web3 startups. The firm seeks to raise US$50m for the fund. (BlockNews) (Valor Investe)
📱Adoption
Tezos is opening a physical office in the Porto Maravilha area of Rio de Janeiro, with great approval from locals. (CoinTelegraph Brasil) (Exame)
A division of the National Institute of Social Security (INSS in PT), an agency within the Ministry of Labor and Welfare, opened a public call for scientific papers focused on improving public services delivery via new technologies like blockchain and artificial intelligence. (Portal do Bitcoin)
Moeda Seeds Bank has been selected to participate in Aceleração Next, the largest fintech accelerator program in Brazil. (CoinTelegraph Brasil)
The Banco Central could soon try to export Pix to other countries such as Colombia and Uruguay. (Livecoins)
BTG Pactual is exploring setting up its own bitcoin mining operation in either Texas, Paraguay or northeast Brazil, CoinTelegraph Brasil reports. The bank is reported to have been negotiating the purchase of 1500 mining machines from Bitmain earlier this year prior to the market crash.
BNB Chain, formerly known as Binance Smart Chain, aims to train 30,000 Web3 developers in Latin American in 2022 and will offer local language educational materials to customers. (CoinTelegraph Brasil)
Fábio Faria, the Governor of the State of Rio de Janeiro, is among the confirmed speakers for Blockchain Rio. The event will be held September 1-4. (CoinTelegraph Brasil) (Exame)
Bitso launched a new crypto education campaign in Brazil in partnership with influencer Fernando Ulrich. (CoinTelegraph Brasil)
Ulrich criticized the Banco Central’s Digital Real design in a video on his YouTube channel. (CoinTelegraph Brasil)
Banco Original will be able to issue utility tokens giving access to different products and services starting in 1Q 2023. (BlockNews)
Ilan Goldfajn, former Central Bank of Brazil president and currently a director at the International Monetary Fund, argued that cryptocurrencies will be replaced by CBDCs. He stated:
“My view is that when you compare it to today’s cryptocurrencies and stablecoins, as central bank currencies come in, they will completely dominate the market, because they will have the capacity of the state, the backing, and that will end up dominating.” (Portal do Bitcoin)
Brasil Bitcoin Beach Action distributed “bitcoin kits” with a t-shirt and 1000 satoshis to 408 students in Jericoacoara. The zone was birthed in October last year, inspired by the El Zonte “Bitcoin Beach” in El Salvador. (CoinTelegraph Brasil)
🎮 NFTs, Gaming and Metaverse
Liqi partnered with H20 Films, a film distributor in the Brazilian market, to create NFTs of national films. (CoinTelegraph Brasil)
Brazilian YouTube Influencer Felipe Neto was among the first participants chosen to test Instagram’s new NFT feature. (Portal do Bitcoin)
“Brazil Com S”, an NFT project, will launch a metaverse experience on September 7, Brazil’s Independence Day. (CoinTelegraph Brasil)
The initial round of 130 artworks are on display at Casa NFT in Sao Paulo. (Exame)
🏛 Public Policy, Regulation and Enforcement
The presidential race between Lula and Jair Bolsonaro is spilling into the OpenSea NFT marketplace, with NFT collections inspired by both candidates coming into fashion. A search for “Bolsonaro” on the platform yields 2,647 results while “Lula” returns 2,689. (Portal do Bitcoin)
ABCripto, a trade group representing crypto exchanges in Brazil, remains in support of legislative language that would require crypto exchanges to segregate customer assets and register in Brazil with a CNPJ in order to operate in the country. Disagreement over these two provisions were what caused the Marco Cripto bill to stall in Congress this summer. (Valor)
“Pharaoh of Bitcoin” Glaidson Acacio dos Santos declared R$60m (US$11.61m) worth of assets in candidacy for Federal Deputy in Rio de Janeiro. In the declaration made to the Superior Electoral Court, he reported an apartment worth R$450,000 and R$60m related to stakes in different companies. (InfoMoney) (Valor)
The Public Ministry of Rio de Janeiro launched an operation into Glaidson as an operator of a money laundering scheme in relation to funds that originated in a corruption ring in Buzios. (Portal do Bitcoin) (Valor Investe)
A group of victims of Atlas Quantum, one of Brazil’s largest-ever bitcoin pyramid schemes that counted 39,000 customers in the country, are petitioning owner Rodrigo Marques to return R$7bn in funds. (CoinTelegraph Brasil)
The Twitter profile of Espirito Santo governor Renato Casagrande and used it to promote the cryptocurrency 1INCH. (Portal do Bitcoin)
Civil Police in São Paulo raided a company suspected of promoting MSK Invest, a bitcoin pyramid scheme that caused R$700m worth of damages. (Portal do Bitcoin)
New legislation introduced in the Chamber of Deputies would prevent the Judiciary branch from being able to access users’ private keys. (CoinTelegraph Brasil)
Federal Police seized R$3m in cryptocurrencies from one of the hackers who attacked the ConectSUS website, which is responsible for the National Vaccination Certificate. (CoinTimes)
Three men were arrested while trying to buy R$1m in crypto using fake R$100 notes in Rio de Janeiro. (CoinTimes)
Mercado Bitcoin CEO Reinaldo Rabelo sought to clarify his views on overseas exchanges during an interview with CoinTelegraph Brasil:
“The Bitcoin Market has nothing against foreign exchanges. What we are contesting are pirated exchanges, foreign or Brazilian, the digital world also allows piracy, so if we are acting and are being charged by the regulators to pay taxes, report information to the Federal Revenue, collaborate with the combat mechanisms and prevention of money laundering and terrorism, it is natural that this requirement should apply to everyone and not just to some.”