The issue of when cryptocurrency will become mainstream is a matter of ‘when,’ not ‘if.’ With an annual growth rate of about 8-10% of the world’s population, one might conclude that the
mass adoption of cryptocurrencies all over the world has just started. Despite the massive valuations of bitcoin and Ethereum, the stability and staking power of stablecoins, and the growing influence of CBDCs, it is clear we are still early in this financial revolution.
Brazil and cryptocurrencies:
The Brazilian cryptocurrency market has come a long way from being the target of the country’s police black book to having the government plan towards national inclusion. A good year in the country’s stock market, acceptance by the nation’s biggest sport, soccer, and the promise of a Central Bank Digital Currency all made the just concluded year a good one in the Brazilian cryptocurrency space.
Like it always is in nations with poor economies, Bitcoin served as a hedge against the Brazilian Real. Since 2015, there have been clamors by seasoned economists on the negative direction the Brazilian real is headed, but nothing was done to mitigate the effect. 2021 was a year of negative records being broken by the currency, making those earlier claims true. The Real became the 38th worst currency in the world after being devalued by almost 7%
Many Brazilians sought refuge from the dying currency, and bitcoin provided a soothing relief for most. As seen in the global crypto market, the BRL/BTC pair moved with the volatility of bitcoin. Starting the year at 167,000 real, the price of Bitcoin doubled to over 350,000 real, before retracing to under 200,000 reals in July. Another upward run began in August, which took the token soared to 367,000 reals in November. The Brazilian market gladly accepted these volatilities, as even more citizens were pulled into the magnetic pull of Bitcoin. A coinmarketcap report disclosed that around 5 percent of the Brazilian population (10 million Brazilians) are in the crypto market.
Brazil financial bodies and Cryptocurrencies:
Apart from the citizens getting involved in cryptocurrencies, the Brazilian government is looking to the cryptocurrency space to salvage what is left of her economy. This move is a smart one because not getting involved early enough has left room for many Bitcoin Ponzi schemes rising, and it could have gotten worse.
The first attempt by the Brazilian financial bodies is seen from the Central Bank of Brazil. There are plans for Central Bank Digital Currency (CBDC) to launch in 2023 or 2024. This would help add the country’s digitalization of its currency. A dedicated team was established to research and monitor the effects of a CBDC.
The Brazilian Stock Exchange has also accepted digital currencies as it listed the first Brazilian Exchange Traded Fund covering both Bitcoin and Ethereum. So far, four more have been listed, and they were some of the most profitable funds in the entire Brazilian Stock market last year.
It has not all been rosy for the Brazilian market. The Federal Congress held a year-long discussion on if, or how, to regulate the cryptocurrency space. A new bill, called Bill 2303/15, was established in December, which includes details on how to regulate cryptocurrencies, and it has been passed to the House’s plenary session, where it will be further discussed. If it is accepted, it would be passed to the Federal Senate.
Exchanges and Brazilian market:
Cryptocurrency tensions arose in Brazil during the previous year, but there was much good news as well.
One of the good news was that indigenous exchanges were able to compete favorably with global exchanges like Binance. These exchanges rallied to the Brazilian Crypto economy Association to ensure Binance is given the same privileges as they are; No more, No Less. Also, they ensured Binance was made to follow the laid down rules by the country’s central banks and Securities and Exchange Commission. With this, there was a delay with Binance’s establishment in the country, and the country is still negotiating its way out.
Even with this, the largest exchange in Brazil, the Mercado Bitcoin (MB), expanded its reach in the crypto space. Having grown into one of the few Crypto Unicorns in South America, it has expanded its operations to the sports industry. This move is a smart one, seeing that sports are one of the few things that unite Latin Americans.
One way Mercado Bitcoin is doing this is by partnering with Chilliz to create fan tokens for the Brazilian market. This way, fans can get more involved in their team’s decisions, like jersey choices, ticket prices for the season, and the starting eleven during the team’s friendly matches or novelty matches. Major Brazilian clubs have accepted this wave, and a few of them are Corinthians, São Paulo, Atlético-MG, and Flamengo.
One can only wonder how much Ethereum’s move to the proof of stake will have on the Brazilian market and how much of this will reflect on the Eth block explorer.
The future of cryptocurrencies in Brazil:
The future of cryptocurrency in Brazil looks promising. Play-to-earn games and the NFT ecosystem have also found their way to the hearts of many Brazilians.
The coming years will be years of more adoption. The Brazilian stock exchange, fearing being left behind, has hinted at increasing its tentacles to cover DeFi and the metaverse. With the Brazilian general election coming up later in the year, the future of cryptocurrencies could hinge on the election outcome. While we await that time, you can stake in Ethereum 2.0’s staking platform via https://redot.com/eth2/