Despite challenges surrounding security and perception of cryptocurrencies, an increasing number of Brazilians are choosing to invest in digital assets.
The ‘Cryptographic Landscape 2023’ study, conducted by blockchain research firm Chainalysis, highlights Brazil’s rise to the ninth position globally in terms of cryptocurrency adoption.
The question that arises is: What’s driving Brazil to this prominent position? What’s motivating Brazilians to lean towards digital coins? What’s the projected crypto adoption in Brazil for the coming year?
Denise Cinelli, a leader at CryptoMarket, notes that, despite the challenges associated with the security and perception of cryptocurrencies, especially due to scams and risky investment schemes that have tarnished the sector’s image, trust in crypto assets like Bitcoin and Ethereum continues to grow. Added to this is the progress in cryptocurrency regulation in Brazil.
The surge of cryptocurrencies in Brazil has prompted authorities to bolster regulations surrounding these assets. “Clearer regulation and oversight of exchanges by the Central Bank have strengthened the crypto ecosystem,” comments Denise.
Denise also highlights the introduction of DREX, a digital representation of the local currency, which will facilitate financial transactions with digital assets and smart contracts, pegged to the value of the real, offering international operations without the fluctuations of current exchange rates.
Brazil has initiated the issuance of a national identity document using a blockchain-based platform. “Stable cryptocurrencies, pegged to stable assets like traditional currencies or commodities, have played a crucial role, as they’ve allowed Brazilians to shield their investments from inflation,” points out Denise.
Investments in cryptocurrencies tied to strong currencies like the dollar and the euro have seen appreciation, and by holding them in crypto funds, investors enjoy greater liquidity and ease of transaction.
Sectors outside the financial realm, such as real estate and e-commerce, have also driven adoption by accepting cryptocurrencies as a form of payment.
A study shows that Brazil leads in Latin America in terms of the percentage of women investing in cryptocurrencies. Denise underscores that education and investment diversification have been key to the growth in cryptocurrency adoption. “I wouldn’t be surprised if, next year, Brazil ranks among the top five globally,” concludes Denise.