🇧🇷BCR #81: Nubank rolls out Nucoin loyalty scheme to 70 million users
Plus: Receita Federal gets serious about crypto taxes; Digital Real pilot to launch in March
Olá pessoal!
Huge welcome to 🇧🇷Brazil Crypto Report for the weeks of February 27 - March 3, 2023!
TONS of important news in this week’s edition to get to, but first I wanted to highlight the Brazil presence at ETHDenver.
Floripa’s Alex Netto even got to dress up as the Bufficorn for a day
Celo Foundation’s Camila Rioja had a super interesting talk on tokenizing public goods in Brazil.
I’m disappointed I wasn’t able to make it this year. ETH Denver for me is the most organic event in the industry and is incredibly useful for understanding what’s coming down the pipe for the rest of the year. I hope everyone who was able to go enjoyed it!
-AWS
Nubank begins releasing Nucoin loyalty program for customers
Nubank began releasing its Nucoin token, developed on Polygon, to customers in Brazil. The coin will function as a rewards mechanism for Nubank’s 70 million customers.
A new whitepaper released by Nubank states:
Nucoin (NCN) is a utility crypto asset that allows customers to be rewarded for using and engaging with their favorite brands within a loyalty network
Nucoin holders will be able to level up in the Nubank loyalty program to unlock new benefits. They will also receive discounts on cryptocurrency purchases made via the Nubank app.
Customers will be able to earn Nucoin four different ways:
an initial airdrop amount determined by their previous history using the platform
raffles held during the first six months after issuance
cashback - customers will receive a fixed amount of Nucoins for every 1 BRL spent with Nubank debit and credit cards.
being engaged in the Nucoin community - providing feedback and suggestions on the product, etc.
100 billion Nucoins will be issued in total, with 80 percent of these allocated for Nubank customers and future partner companies.
The price of the token will be determined on a supply and demand basis, though the starting value of each Nucoin has yet to be determined.
As of now, Nucoins cannot be withdrawn to digital wallets not hosted by Nubank. However, customers will be able to trade Nucoins for fiat money with other customers. But for the time being, all Nucoin transactions will take place within the Nubank app and not on a secondary market.
Fernando Czapski, general manager of Nucoin, said in a statement.
“Nucoin is a revolution co-created by our customers together with partners that strengthen the ecosystem and make it useful inside and outside Nubank.”
Receita Federal to cross-reference exchange reportages against tax filings
Brazil’s tax authority announced for the first time that it will begin cross-referencing information from tax filings made by individuals against reportages made to the agency by crypto exchanges.
Brazilian crypto exchanges have been required to report all of their customer transactions to the Receita Federal since 2019, pursuant to Normative Instruction 1888. The rule requires international exchanges with Brazilian customers to report transactions that exceed a monthly limit of R$30,000 (US$5,700).
This means that if there are discrepancies between an individual’s tax filing and the reportage provided by the exchange, the individual filer could receive an inquiry from the agency.
In an interview with Portal do Bitcoin, José Carlos Fernandes da Fonseca - supervisor of the income tax program, stated that the intention is to induce declarations of cryptocurrencies by those who have previously never done so.
He also issued a warning to Brazilians who use overseas exchanges for tax avoidance purposes:
“The Receita has the power to inspect a declaration for five years and, in five years, it may have information that it does not have today”
Digital real pilot to be deployed in March, per Central Bank
Roberto Campos Neto, president of the Banco Central, confirmed that a test version of the Digital Real, Brazil’s CBDC, will be launched in March - marking the first time that Brazil has issued a digital currency.
"Next month (March) we will already have a digital currency pilot, Brazil will be one of the first countries to do this. We will move forward with the pilot as we get security”.
The remarks came at an event organized by the Brazilian Institute of Education, Development and Research. Campos Neto also reportedly stated at the event that he told US Treasury Secretary Janet Yellen that the FTX collapse would not have happened had banks not been prohibited from custodying crypto.
Digital Real project coordinator Fábio Araújo also revealed that the bank will soon choose what blockchain it will use for the project.
A formal announcement on the Digital Real will be made Monday, March 6 at an event hosted by the Central Bank.
CVM President Nascimento says cryptoeconomy can be a “path of development” for Brazil
João Pedro Nascimento, president of the CVM - Brazil’s securities authority, shared his views on crypto’s potential for the country.
“I believe that the cryptoeconomy can be another path for the country's development, especially in terms of the future being green and digital…Imagine creating, through tokenization, the possibility for people from different countries to invest in Brazilian carbon credits, issued by Brazilian companies.”
He also stressed the importance of recognizing the existence of the “good people” operating in the industry, while emphasizing that the agency does not intend to regulate staking services that generate passive crypto income.
He also commented on the crypto law passed by Congress last December, remarking that it was a major breakthrough but that it was weak in several aspects such as asset segregation - a provision that was dropped during the legislative process. The CVM is expected to have authority over crypto tokens that are securities.
He stated:
“The great advantage and the great merit of this law in the eyes of the CVM was to have preserved the competence of the CVM in relation to the securities market. It brought a very comprehensive definition of what a virtual asset service provider is, such as exchanges, for example.
But it left points open, which are kind of a common sense among people who work with cryptoeconomics, and one of them was the need to regulate the issue of asset segregation, especially there in the intermediary environment, avoiding the confusion of customer resources with exchange resources.”
🗞Brazil Crypto News Rundown
📈 Markets
Coinbase is now accepting Pix payments through a partnership with payment processor EBANX. (CoinTelegraph Brasil)
Crypto exchange Bitget is looking to tap investment advisors in Brazil as a means to onboarding more clients. It is currently negotiating with four offices, representing a universe of 4,000 advisors, to distribute crypto assets. Caio Nascimento, Bitget’s marketing and growth manager for Latin America, stated:
"The AAI [Agente Autonomo de Investimentos] would have one of the safest and most complete platforms to offer its clients interested in investing in crypto, and we, on the other hand, would have the origination potential that the agents have, in addition to the necessary support for the correct and safe introduction of customers in the crypto market. In the end, it's a win-win." (CoinTelegraph Brasil)
The B3 exchange’s application to launch a bitcoin futures product was denied by the CVM after failing to fulfill certain requirements. It will resubmit its application and has modified the expected date of its bitcoin futures product launch until June 30, 2023. There was some confusion as the English version of its public documentation originally stated that the launch date was March 31, but the exchange modified the language. (Portal do Bitcoin) (Exame) (CoinTelegraph Brasil
912,000 unique individuals (CPFs) reported crypto transactions to the Receita Federal in December 2022, an increase of 89 percent over the prior year period but a decrease of 22 percent from November 2022. 63,500 unique businesses (CNPJs) reported crypto trades during the month - seven times more than December 2021 and up 32 percent from November. (Valor Investe)
Brazilians conducted R$14.8 billion (US$2.85 billion) in crypto trades during the month of January 2023, according to a filing from the Receita Federal. The figure is up 12 percent from December 2022 and marks the highest figure since September 2022. (Portal do Bitcoin) (Exame)
Crypto exchange Bitso is bringing Circle’s Euro Coin (EUROC), a Euro-pegged stablecoin, to the Brazil market with an eye for targeting the 1.3 million Brazilians living in Europe. Thales Freitas, CEO of Bitso Brasil, told InfoMoney:
“We had already been working in increasing collaboration with Brazilian investors and companies to help them hedge the exchange rate exposure of their assets with the digital dollar and, after we listed the digital euro, we also saw an increase in this interest in view of the increasing opportunities for transactions. between Brazil and European countries
US crypto exchange Gemini has enabled Portuguese language on its website and mobile app. (CoinTelegraph Brasil)
Ridian, a Mexico-based trading platform that raised US$6.2 million last year, is now offerings its platform to Brazilians. The platform offers automated quantitative investment strategies and connects multiple exchange such as OKX, Bitso, Binance and Crypto.com via an API to help users manage their portfolios. (InfoMoney) (Valor)
Foxbit launched its Foxbit Pro platform for professional traders on March 1. To provide heightened liquidity, it will offer trading in 330 tokens with access to 570 international order books. (Valor) (InfoMoney)
Stablecoins on the Tron network are widely used in Brazil and other emerging market countries, Visa’s crypto lead pointed out in a Twitter thread.
📱Adoption
Brazilian fintech platform Magalu will begin offering crypto purchases to its 37 million customers in its app via a white label partnership with Mercado Bitcoin.
Under the partnership, MB customers will also have access to a new prepaid crypto debit card issued by Magalu
A formal release date has not been announced, but the company stated the first three cryptos will be made available for trading “soon”
Magalu follows in the footsteps of similar platforms Mercado Pago and PicPay, which have also rolled out crypto purchases for customers
Magalu is owned by the Magazine Group Luiza, a publicly listed firm
Leandro Hespanhol, commercial and new business director at Magalu, stated:
“For many of these customers, this will be the first contact with crypto assets and the opportunity to start investing in digital currencies, starting from 1 real.” (InfoMoney) (Valor) (Portal do Bitcoin)
SmartPay, the creator of Swapix which uses Pix to convert between tether and BRL, is enabling withdrawals of up to 3,000 BRL during the day and 1,000 BRL at night. (BlockNews)
Crypto exchange Ripio announced an integration with Polygon that will allow Polygon users to use the Ripio Portal, Trade and Wallet products. The partnership will allow Ripio users access to DeFi money market protocols like Aave and Compound. Hamzah Khan, head of DeFi at Polygon Labs, said in a statement:
“This partnership is a key step in our mission to expand use of the Polygon network across Latin America.” (CoinTelegraph Brasil)
Daniel Coquieri of Liqi and José Artur Ribeiro of Coinext were named as CoinTelegraph Brasil’s male personalities of the year for 2022
Mercado Bitcoin launched a new content hub devoted to crypto and Web3 education.
Brazilian YouTuber and crypto promoter Ronaldo Silva claimed in a recent video to have lost R$25,000 in a scam. (Livecoins)
Crypto news site CoinTimes laid off 20 of its 32 employees in a February layoff round. The site was first created in 2018 as an extension of Foxbit’s blog but became independent in 2019. (Portal do Bitcoin)
Bywise, a Brazilian blockchain project, is launching a corporate blockchain that uses an immutability proof algorithm. (BlockNews)
Portal do Bitcoin profiled Jônadas Techio, a former philosophy professor at Federal University of Rio Grande do Sul who went down the bitcoin rabbit hole and became a scientist focusing on computing cryptography.
Brazilian startup WEB3DEV gave out R$250,000 in grants to 85 members of its developer community in 2022, the collective announced. (CoinTelegraph Brasil)
Fundaçao Getulio Vargas announced a new course on blockchain technology and decentralized finance. (Exame)
Banco Bradesco is partnering with the University of São Paulo to explore cryptocurrencies via a new partnership. (Livecoins)
Unicamp professor and bitcoin hater Jorge Stolfi compared bitcoin to a “radioactive toxic Ebola” virus in comments for an MIT Technology Review article
Financial influencer and Suno Research founder Tiago Reis posted a sarcastic tweet saying that he purchased a Braiscompany vest.
🏛 Public Policy, Regulation and Enforcement
João Pedro Nascimento, CVM president, expects the Executive Branch to issue a formal decree implementing Law 14,478/2022 - which was passed in December 2022 and creates a regulatory framework for crypto businesses - in the coming days. He stated at an event:
“We expect that the regulatory decree will have a mechanism that reserves for the CVM the competence to be able to deal with all crypto-assets that are securities”. (InfoMoney) (Valor Investe)
Alexandre Padilha, Brazil’s new Minister of International Relations, said that the government will prioritize crypto regulation and a carbon credit framework following a meeting with Central Bank president Roberto Campos Neto. (Valor)
The Banco Central is now permitting payments via WhatsApp after blocking Meta/Facebook’s initiative to enable the service in Brazil. (CoinTelegraph Brasil)
Lula’s proposal to create a shared Brazil-Argentina digital currency doesn’t have many supporters at the Brazilian Central Bank, CoinTelegraph Brasil reports. However, Roberto Campos Neto is supportive of using Pix as a tool to further regional integration across Mercosul.
Braiscompany co-founders Antonio Neto Ais and Fabrícia Campos transferred most of their money out of their bank accounts before they were frozen by authorities. A Paraíba court ordered R$45 million blocked, but authorities only found R$74 in Antonio Neto’s account and R$125 in Campos’s. (Portal do Bitcoin)
Federal Police are seeking information on the third party investment brokers that routed customers into the Braiscompany pyramid scheme. (Livecoins)
Clélio Cabral, one of Braiscompany’s top outside brokers, deleted pictures of himself with Neto and Campos on his Instagram feed. (Portal do Bitcoin)
Vórtx QR Tokenizadora has joined crypto lobby group ABCripto as an associate member. (Crypto Times)
A wallet linked to “Pharaoh of Bitcoins” Glaidson Acácio dos Santos has been reactivated after being dormant for 14 months. 1,395 bitcoins - roughly R$163 million or US$31 million - were moved on February 28. (Portal do Bitcoin)
Portal do Bitcoin reported that the leaders of GAS Consultoria and Trust Investing, two of Brazil’s largest now-collapsed bitcoin pyramid schemes, transacted R$233,000 between themselves in 2020. A compliant from the Federal Public Ministry reads:
“[Trust Investing CEO] Cláudio Barbosa had financial relationships with several legal entities, as well as with the individual Glaidson Acácio dos Santos, known as the “FARAÓ DOS BITCOINS”, arrested by the Federal Police in August 2021 and accused of a crime against the financial system and criminal organization .”
Brazil’s Ministry of Mines and Energy and National Mining Agency has prohibited mining companies (actual mining, not crypto mining) from receiving payment in the form of cryptocurrencies.
The prohibition is an attempt to prevent crypto assets from being used for money laundering and other illicit purposes.
It comes in response to numerous reports of illegal mining operations using crypto to allegedly launder funds.
Thiago Nicolai, an attorney with DSA Advogados, told Valor that the rule is “exaggerated” to the ubiquity of crypto assets and the abundance of money laundering alternatives for miners engaged who wish to engage in this activity.
“Operations to cover up illicit transactions can be carried out with any tool, whether companies, investments or legal contracts.” (CoinTelegraph Brasil) (Portal do Bitcoin) (InfoMoney)
The CVM issued a stop order against Nixse, LTD, which is a Taiwanese company that has been offering cryptocurrency and foreign exchange trading services in Brazil without authorization. (Portal do Bitcoin)
The Superior Tribunal de Justiça denied a habeas corpus petition for a man who was arrested last August for trying to buy R$1 million in cryptocurrency with fake banknotes. (Portal do Bitcoin)
Civil Police in the Federal District filed a lawsuit against several 11 individuals accused of operating the Kriptacoin pyramid scheme, which began in 2016. (Portal do Bitcoin)