Brazilians are increasingly turning to stable currencies in the face of rising inflation, as their local currency, the Brazilian Real (BRL), has depreciated against the US dollar.
Brazilians are embracing stable currencies
Recent market data shows that stablecoins account for around 50% of Brazilian Real (BRL) volumes, while five percent is comprised of USD. This development presents an encouraging statistic regarding the rate of stablecoin adoption in Brazil.
Stablecoins are cryptocurrencies designed to track “more stable” fiat currencies such as the USD, Euro or Brazilian Real. They play an important role in crypto, acting as capital carriers and stores of value during times of high volatility. Market data shows that BUSD, a stablecoin issued by Paxos under the Binance brand, and USDT, the world’s most liquid stablecoin by Tether Holdings, are popular among Brazilians.
Recent macroeconomic data paint a grim picture of Brazil’s economy. In June, the inflation rate reached 9.704%, the highest in 2022, causing the BRL to fall against the USD. As a result, more and more citizens are turning to stablecoins to protect their savings from high inflation.
crypto law in brazil
Brazilian President Jair Bolsonaro on 23 December signed a bill into law Recognizing BTC as an investment asset class allows its citizens to pay for goods and services using bitcoin. The Central Bank of Brazil (BCB) will regulate BTC as a medium of exchange. On the other hand, the Securities and Exchange Commission (CVM) will oversee entities that accept BTC investments.
Following the approval of this bill, the law requires crypto firms in Brazil to obtain a license for the custody and management of virtual assets by third parties. Legislation has been enacted to prevent a recurrence of the FTX debacle in the near future.
Brazil does not accept BTC as legal tender, despite a law passed by Jair Bolsonaro. However, this is a big step forward in clarifying the complex of crypto regulation and responsible institutions.
Earlier on November 3, the stablecoin became usable on USDT. 24,000 ATMs across Brazil, A collaboration with Smartpay, a Brazilian crypto service provider, enabled the integration. It allows users to transfer USDT from any wallet to the ATM to make transactions. Users can currently only deposit USDT and withdraw BRL. In February, they will be able to deposit BRL at ATMs and receive USDT in their wallets.
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