Brazil Sees Surge in Crypto Asset Usage, Central Bank Chief Reports
Brazil’s central bank chief, Gabriel Galipolo, revealed on Thursday that the country’s crypto asset usage has seen a significant surge over the past two to three years. Speaking at a Bank for International Settlements event in Mexico City, Galipolo stated that approximately 90% of this activity is linked to stablecoins.
Stablecoins, being pegged to real-world assets like the U.S. dollar, fluctuate less than other cryptocurrencies such as bitcoin. Galipolo emphasized that the primary driver behind this trend is the use of cryptocurrencies as a means of payment, particularly for purchasing goods from abroad. This poses significant challenges for oversight and regulation, as it “maintains some kind of opaque vision for taxation or for money laundering,” according to Galipolo.
The central bank chief also discussed Brazil’s Drex, clarifying that it is not fundamentally a central bank digital currency but rather an infrastructure designed to improve credit with collateralized assets. Drex will utilize distributed ledger technology for settling wholesale interbank transactions, while retail access will be based on tokenized bank deposits.
Galipolo highlighted the potential of payment integration to facilitate cross-border transactions across the Americas. He also noted that Brazil’s popular instant payment system, Pix, could enable integration with international instant payment networks due to its programmability.
The surge in crypto asset usage and the development of new financial infrastructures underscore the evolving landscape of financial transactions in Brazil and beyond.
