🇧🇷BCR #91: A record 1.6 million Brazilians traded crypto in March
Plus: Brazil well-represented at FT crypto conference in London; Hashdex hosts Twitter Spaces with Michael Saylor
Welcome to 🇧🇷Brazil Crypto Report for the week of May 8-12, 2023.
I hope everyone is doing well. I’m glad to be back in Brazil for a bit after driving a U-Haul truck across the US last week - it’s been a while since I’ve drank so many Red Bulls in such a short period. I was able to catch a business class upgrade on the flight back to SP so that helped with the recovery!
It was another eventful week in the Brazil crypto world so let’s dive in. Have a great week everyone.
A record 1.6 million Brazilians traded crypto in March
In March 2023, data from Brazil's tax authority, Receita Federal, revealed that 1.6 million Brazilians reported cryptocurrency trades, marking the highest total since records began in 2019. However, this figure likely underrepresents the actual number of cryptocurrency trades, as it excludes many transactions on foreign exchanges like Binance.
Additionally, a record 61,300 individual companies (CNPJs) reported engaging in crypto trades during the same month.
Interestingly, stablecoins such as USDC, USDT, and BUSD accounted for 83 percent of the total traded volume for the month, which amounted to R$15.8 billion. This reported volume represented a 32 percent increase compared to the same period in the previous year .(Exame) (InfoMoney) (Valor Investe) (Valor)
Private sector proposals for Digital Real testing begin to roll in
Several major banks, fintechs, and credit unions have submitted proposals to participate in the testing phase of the Digital Real, which is set to begin in May. According to Valor, some notable participants that have submitted thus far include Bradesco, Itaú, Banco do Brasil, Sicoob, Sicredi, Mercado Bitcoin, BV, and ABBC (Association of Brazilian Banks).
The Central Bank has opened ten vacancies for private sector participation but may increase this number based on project demand. Participants will be selected based on their technical capacity in blockchain technology and their relevant experience.
The testing of the digital real will cover various segments, including wholesale and retail, as well as the negotiation of National Treasury bonds.
While XP, Genial, BTG Pactual, Santander, Safra, Nubank, and Caixa (with the Elo banner) were mentioned as potential participants, there is no confirmation of their involvement at this stage. The selection process prioritizes technical expertise and the ability to contribute to the testing phase. The first meeting of the forum is scheduled for June.
Brazil’s crypto ecosystem gets a shoutout in Fortune
Leo Schwartz, a crypto regulatory reporter for Fortune who attended and moderated a session at Web Summit Rio earlier this month, wrote a nice piece about what he learned about Brazil’s emergent crypto economy.
The piece, entitled Brazil’s unlikely bid to become a global crypto hub, includes quotes from CVM, Hashdex and Parfin representatives and concludes stating that:
With the U.S. preparing for yet another congressional hearing on digital asset legislation, Brazil’s progress is one more sign that crypto is a global story.
Brazil well-represented at Financial Times Crypto and Digital Assets Summit
Hashdex’s Bruno Ramos de Sousa spoke on a panel entitled “The Future of Trading and Investment Strategies”
QR Capital’s Fernando Carvalho, Nicole Dyskant of Fireblocks and Renato Dias de Brito Gomes of the Banco Central spoke on the panel “Are cryptocurrencies a viable solution to financial inclusion in Latin America?”
🗞Brazil Crypto News Rundown
Brazil saw the smallest outflow from cryptocurrency funds globally during the period of May 1 and May 8, with just US$300,000 worth of funds withdrawn from funds with exposure to digital assets. Crypto funds globally experienced withdrawals of US$54 million during the same period. (CoinTelegraph Brasil)
The Titanium Cripto Structure Fl, a fund managed by Titanium Asset, produced a 12.37 percent return over the 12 months leading up to April.
BTG Pactual’s Reference Bitcoin 20 Fl, Brazil’s second-largest crypto fund in terms of number of shareholders, generated a 6.8 percent for the same period.
The Hashdex 20 Nasdaq Crypto fund, Brazil’s largest in terms of shareholders, reached a 5.56 percent return (InfoMoney)
Brazilian funds that allocate to crypto had 118,000 total shareholders in April, down from 126,400 in January of this year. Analysts interviewed by InfoMoney attributed the drop to steadfast popularity of fixed income investments in the Brazil market. (InfoMoney)
Crypto asset manager Hashdex hosted a Twitter Spaces with bitcoin hero and Microstrategy CEO Michael Saylor, who argued during the conversation that a bitcoin ETF approval in the US could cause the price of the cryptocurrency to 10x.
Unfortunately, Saylor added that he doesn’t expect to see the US approve a spot bitcoin ETF “anytime soon”. (Valor)
ANBIMA, the Brazilian Financial and Capital Markets Association, proposed a set of guidelines to enhance the disclosure and reporting requirements for these funds. These include providing more detailed information about their investment strategies, risk management practices, and the valuation of digital assets. (InfoMoney) (CoinTelegraph Brasil)
Mynt, the crypto platform operated by investment bank BTG Pactual, announced the listing of five new coins including Dogecoin - the popular dog-themed memecoins, Gala Games, Optimism and Compound. (Exame) (Livecoins) (Valor)
The crash of Viralata Finance, a Brazilian memecoin launched two years ago, highlights the dangers and risks associated with investing in Ponzi coin type projects. (Livecoins)
Mercado Bitcoin listed $VERDAO, the official fan token of the Palmeiras football club. (Portal do Bitcoin)
Foxbit has announced the launch of a new feature that allows users to purchase cryptocurrencies using credit cards. (CriptoFacil)
Crypto infrastructure firm Paxos has hired Juliana Felippe to lead its business in Brazil. Felippe is a veteran of Linkedin, Robert Half and Lojas Renner. Paxos is currently a service provider to Nubank, Mercado Pago and PicPay in the Brazil market. Felippe said in a statement:
“Brazil is a strategic market for Paxos, not only because of its expansion potential, but also because of the positive momentum in the blockchain and cryptocurrency market.” (Valor)
Brazilian fintech Vert Capital has joined the Canton Network, which aims to build a blockchain solution for interoperability and synchronization of financial markets with data privacy. Other founding members of the network include Goldman Sachs and Microsoft. (BlockNews)
Mercado Bitcoin’s Fabricio Tota chronicled his key learnings from the Consensus 2023 conference in Austin, Texas last month in a column for Estadão. He writes that the progress being made in the Brazil ecosystem is gaining wider recognition across the industry:
“What was formerly referred to as the Latam (Latin America) crypto market is now specifically referred to as the Brazilian crypto market, a reflection of the progressive environment we have built in the country, unique even in region.”
Exame profiled the Edifício Birmann 21 building in the Faria Lima district of São Paulo, which is being tokenized into fractional shares represented by digital tokens.
Fan tokens that create a new medium for clubs to engage fans are a trend that is here to stay in Latin America, argues Bitso’s Andres Salcedo
"Latin American fans are among the most loyal and passionate in the world. This, added to the strength that the crypto world has gained in Latin America, make our region an extremely fertile ground to offer these tokens." (CoinTelegraph Brasil)
Members of the BRICS group of nations (Brazil, Russia, India, China, and South Africa) are advocating for the creation of a common currency for the bloc called BRICSCoin. (Livecoins)
Brazil's Ministry of Health is exploring the possible application of blockchain and cryptocurrency technology for creating and maintaining accurate and tamper-proof vaccine records. (InfoMoney)
João Marco Braga da Cunha of Hashdex wrote an op-ed for CNN Brasil highlighting the Brazilian Central Bank’s progressive approach towards digital currencies and Bitcoin
More than half of financial institutions in Brazil are not prepared for the Web3 era, according to a survey by blockchain-as-a-service firm Cryptum. The survey found that a significant number of financial organizations lack the necessary infrastructure, knowledge, and understanding of Web3 technologies such as blockchain, decentralized finance, and digital assets. (BlockNews)
Sabrina Olivo had a fun write up of the most recent Rio Crypto Day on May 7, which featured guest lectures from Fernando Ulrich and Felippe Percigo. (BeinCrypto)
Ethereum Brasil, Blockchain Festival and the University of São Paulo are partnering to produce a week of blockchain events from June 20-25. The marathon week will include Digital Finance Brasil - a premium event for the professional investor community. The Central Bank’s LIFT Lab representatives will also be present to discuss the latest stages of Digital Real development.
Osten, one of the largest luxury and electric vehicle dealers in Brazil, is creating a new business unit focused on cryptocurrencies called Osten Cripto. The dealer will also begin accepting crypto as payment for BMW and Tesla electric cars. (CriptoFacil)
Embrapa, the Brazilian state-backed agricultural research company, is implementing blockchain technology in a sugar tracking system. By utilizing blockchain, Embrapa aims to enhance transparency and traceability in the sugar supply chain, ensuring the origin and quality of the product. (Valor) (CoinTelegraph Brasil)
Interest in cryptocurrency payments is growing despite the prolonged crypto winter, according to a new survey by global payments giant FIS. (Valor)
Brazil has the fifth highest number of cell phones in the world, according to a new study analyzing World Bank figures. This high penetration is suggested to be a key growth driver for the country’s crypto ecosystem. (CoinTelegraph Brasil)
The government of Paraná, a state in Brazil, has embraced blockchain to develop a decentralized application similar to MetaMask. This initiative aims to provide citizens with easy access to public services and provide enhanced transparency and efficiency. (CoinTelegraph Brasil)
Cibra, a Brazilian agribusiness company, is launching its own cryptocurrency backed by fertilizer assets with the goal of achieving RR10 billion in sales in 2023. (CoinTelegraph Brasil)
The development of Web3 in Brazil is being hindered by a shortage of skilled workers, argues Adriana Moura - co-founder of Go Digital Factor. (CoinTelegraph Brasil)
🎮 NFTs, Gaming and Metaverse
Binance launched its Bicasso platform for generating NFTs, and the platform saw significant activity in Brazil - ranking fourth in the number of total NFTs generated. (BeinCrypto)
Chiliz, a blockchain-based platform for sports and entertainment that supports numerous “fan tokens”, is launching a new enhanced blockchain called Socios 2.0 that replaces the current Chiliz Chain. (InfoMoney)
The band Raimundos will perform a special tribute concert to late bassist Canisso, who died of a heart attack in March. The event will feature various immersive experiences for attendees who purchase NFT tickets. (Portal do Bitcoin)
A Brazilian startup called Pepita Global has introduced NFTs backed by gold extraction, aiming to expand the utility token to include other commodities. The project seeks to provide transparency and traceability to the gold extraction process and enable investors to acquire digital assets linked to physical goods. (CoinTelegraph Brasil)
🏛 Public Policy, Regulation and Enforcement
A São Paulo court has granted Binance's request to release approximately R$ 430 million (US$87 million) that were blocked by the Brazilian fintech Capitual's accounts last year.
The funds have been held in a judicial account since last summer when Binance terminated its contract with Capitual for fiat on and off-ramp services.
Capitual filed a request to suspend the release of funds
Sources within Capitual told Valor that there is a concern the company may be held liable for losses incurred by Binance customers:
“It's a foreign company, with no assets in Brazil, and nobody knows where those values will go." (Valor)
Proposed legislation PL 2338/2023 aims to regulate the use of artificial intelligence in the country. The bill aims to provide guidelines and accountability for the development and use of AI systems, ensuring transparency, privacy, and security. (Exame) (BeinCrypto)
Aílton Aquino dos Santos has been appointed by Finance Minister Fernando Haddad to the post of Director of Inspection at the Central Bank. If he is confirmed by Congress, he will likely oversee regulation of bitcoin, cryptocurrencies and Digital Real. (CoinTelegraph Brasil)
Crypto platform Bitybank is the latest company to join ABCripto, a trade group representing the industry in Brazil. (Portal do Bitcoin)
The Central Bank of Brazil is establishing a forum for discussions on the digital real. The forum will play the role of a permanent advisory committee that also functions as a communication channel between relevant stakeholders. It will consist of representatives from regulated institutions, developers, distributed ledger technology companies, and IT service providers. (BlockNews) (Livecoins) (Portal do Bitcoin) (Valor)
Braiscompany founders Antônio Neto Ais and Fabrícia Farias Campos said, through their attorneys, that they would only return to Brazil if the arrest warrants issued against them are canceled. The couple has been on the run since February, when Federal Police shut down Braiscompany (Livecoins)
FXWinning, a forex and cryptocurrency platform led by Brazilian CEO Rafael Brito Cutie, is delaying withdrawals to clients worldwide, including Brazil. (Livecoins)
Glauber Contessoto, aka SlumDogeMillionaire - a Brazilian trader who struck it rich trading Dogecoin, is being accused by Crypto Twitter sleuth ZachXBT of manipulating the market for a new memecoin called GrumpyCat coin (Portal do Bitcoin)
The CVM is organizing a free course on cryptocurrencies and ChatGPT for investors, as part of the 10th National Financial Education Week (Semana ENEF) from May 15 to 21. (Livecoins)
George Santos, a Brazilian who serves as a Member of the United States Congress representing New York, was charged with fraud and several financial crimes by the US Department of Justice. Santos had taken campaign donations from FTX prior to the exchange’s collapse. (Portal do Bitcoin)
The São Paulo Court of Appeals has recognized B Fintech Serviços de Tecnologia LTDA as part of the Binance’s corporate structure, despite Binance's claims to the contrary. The ruling strengthens the position of clients seeking legal action against Binance through B Fintech in Brazil. (Livecoins)
Brazilian police have successfully recovered 300 stolen bitcoin mining machines in Paraguay. The mining equipment, valued at around US$2.5 million (R$12.3 million), was stolen by a criminal organization and transported across the border. (Portal do Bitcoin)
Brazilian authorities have apprehended a man believed to be responsible for a recent explosion at a supermarket in São Paulo, who was reportedly demanding bitcoin as ransom. The suspect allegedly detonated an explosive device inside the supermarket and left behind a message demanding a significant amount of bitcoin. (Livecoins)
A director of a company in Caldas Novas, a resort town in the state of Goias, is accused of stealing R$500,000 of cryptocurrencies and then fleeing the country. (Livecoins)
Alessandro Vieira, a Brazilian senator, has proposed an amendment that aims to tax cryptocurrencies held by Brazilians abroad. (CoinTelegraph Brasil)
An obscure crypto company called XYZ Crypto has been reported to have a connection with a militia group operating out of Rio de Janeiro. The militia has been allegedly using platform for money laundering and other illicit activities. (Portal do Bitcoin)
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