Why Brazil is the Centre in Latin America for Global Crypto Platforms?01 August, 2022
As there has been a large cryptocurrency boom in Brazil, several cryptocurrency exchanges have shown interest. Many cryptocurrency exchanges operating in different corners of the world believe that Latin America’s primary market for crypto coins in 2022 will be Brazil. Some major cryptocurrency exchanges like coin bass, crypto.com, tesla-coin.io and many more are interested in Brazil. It is the region’s largest economy, and there are many significant economic imbalances. For balancing the economic stability of Brazil, cryptocurrencies can play a very crucial role. According to recent data, Brazil had an inflation rate of 10% in 2021.
Apart from this, inflation is increasing at a very steady speed when we talk about inflation. The Brazilian currency depreciated from 0.25 in January 2022 to $0.18 in January 2022. Even though the speed is deficient, it may fall even lower further. Therefore, there is a requirement for a better option in such a circumstance compared to the United States dollars. Also, the people are now no longer capable of investing in the United States dollar due to the increasing inflation. Therefore, they get less United States dollars for selling more of their original currency. When it comes to macroeconomic imbalances, they are at a peak in Brazil, which has created an opportunity for cryptocurrencies.
In 2020, Brazil’s economic imbalances led to the attraction of different cryptocurrency exchanges. In that year, people were more interested in stable coins, and the number of stable coin traders was increasing at a tremendous speed. Between January 2021 and November 2021, there was a total trade of $11.4 billion in stable coins itself. It is almost triple the total that was traded in 2020. Also, bitcoin alone was treated to $10.8 billion in the same period, which is extraordinary data for such a nation. Hence, Brazil is undoubtedly an incredible opportunity for every cryptocurrency exchange now.
Why go for crypto?
Also, when you live in Brazil, you will get a lot of incentives for purchasing cryptocurrencies. People living in Brazil do not have much interest in investing in United States dollars to make it and hedge against inflation. They want to go for cryptocurrencies because the United States dollar devalues day by day. Their currency is getting weaker, and therefore, they cannot look upon the dollar to save them. While buying foreign currency, they are forced to pay if financial operation tax of between 1.1% to 6.38%, as per these better investment option. However, you will not see this situation with the cryptos. They do not have to pay such a high tax for the crypto coins, making digital coins a better option than the dollar.
Moreover, to prevent people from investing in United States dollars, the government also do not allow them to store the US dollar in the Brazilian central bank. Also, they cannot store the same in any country’s local bank. When we consider the recent updates on this policy, the government has abolished this prohibition according to the new exchange rate framework of December 2021. However, it is not yet implemented entirely in Brazil. Therefore, Brazilians prefer investing in cryptocurrencies over traditional investments. According to the data released by the central bank of Brazil, in August 2021, Brazilians had $50 billion invested in cryptocurrencies. But, the investment in United States stocks were just $16 billion.
The people living in Brazil are very familiar with the digital methods of making payments and investments. In October 2020, Brazil’s apex bank also launched its PIX application. It was very successful and became so popular that it had more than 104 million users by November 2021.Even though the total population of Brazil is 214 million, a large share of the total population started using digital payment methods. Also, the concentration towards the digital transactions were more than 70% of the total transaction.Binance, which is a very well-known cryptocurrency exchange all over the world,has also shown a significant interest in Brazil.It is the largest potential market for cryptocurrencies in Latin America per every metric necessary for its growth. Binance showed support by hiring more and more resilience to strengthen the team which can operate in Brazil for future operations.Binance and exchanges like Coinbase, crypto.com, and many more are interested in Brazil.
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