The last year has seen a flurry of activity in the cryptocurrency world, with more than 100 cryptocurrencies launched since October 2017. This is driven by Brazil’s new government adopting Bitcoin as its official currency and making it legal tender for tax payments. What do you think?
Brazil has had a year of mass adoption for cryptocurrencies. The country is one of the most developed in the world and has been using cryptocurrencies as an alternative to the local currency.
Through the course of 2021, the Brazilian cryptocurrency market was able to separate itself from the police pages and eventually get popular recognition, whether in the financial market or even in the biggest national passion: soccer.
The Brazilian real, which finished 2021 by shattering negative records and devaluing by 6.5 percent by December, became the 38th worst currency in the world, served as a powerful alternative to Bitcoin (BTC) last year.
The largest cryptocurrency, Bitcoin, saw ups and downs throughout the year, falling to a low of 167,000 real in January and rising to 355,000 real in May. The BRL/BTC pair remained trapped around 200,000 reals due to Bitcoin’s decline until August, when it started to increase and reached a new record high of 367,000 reals on Nov. 8.
Brazilians went to cryptocurrencies when they realized they needed economic protection. According to CoinMarketCap, 10 million Brazilians are now active in the cryptocurrency market.
The Brazilian Stock Exchange introduced exchange-traded funds (ETFs) tied to Bitcoin and Ether in conventional financial markets (ETH). Five ETFs are now listed on B3, several of which are expected to be among the most successful on the whole Brazilian stock market in 2021.
A central bank digital currency (CBDC) that might be introduced as early as 2023, the digital real, has undergone further advancements, according to the Central Bank of Brazil. A specialized team at the monetary authority will conduct a series of tests as part of the Brazilian Central Bank’s ongoing efforts to integrate blockchain technology into its services.
Brazilian lawmakers enacted Bill 2303/15, which defines standards for the regulation of cryptocurrencies in the nation, in December after a protracted year of debates on cryptocurrency regulation in the Federal Congress. The Federal Senate and the House of Representatives will continue to consider the measure in 2022.
In 2021, there was conflict among the country’s top cryptocurrency players, but there were also some encouraging developments.
Brazilian exchanges competed against the leading cryptocurrency exchange Binance. The Brazilian Cryptoeconomy Association and exchanges nationwide collaborated to ensure that Binance complied with regulations set out by the Brazilian Securities and Exchange Commission, Federal Revenue Service, and central bank. The international exchange is still in negotiations with Brazil’s financial regulators and market watchdogs.
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On the other hand, the biggest exchange in Brazil, Mercado Bitcoin (MB), which is now one of Latin America’s crypto unicorns, increased its activities there and officially entered the sports industry. Additionally, MB and Chiliz collaborated to make fan tokens more available to Brazilian supporters. National football powerhouses like Corinthians, So Paulo, Internacional, Atlético-MG, and Flamengo embraced this innovation.
The nonfungible token (NFT) market also expanded to Brazil, where it was widely welcomed by Brazilian gamers in play-to-earn games, collectable platforms, and even the arts, as it was embraced by well-known musicians from Brazil like André Abujamra and Zeca Baleiro.
We can anticipate even more significant Latin American and Brazilian companies entering the bitcoin sector during the next year. With specialists focusing on decentralized finance (DeFi), NFTs, and the Metaverse, the Brazilian Stock Exchange intends to increase the selection of assets tied to cryptocurrencies it offers.
It’s also important to keep in mind that 2022 is an election year in a nation that has been divided since 2016 and whose administration, the Bolsonaro one, is unpopular and characterized by social unrest. The future of the Brazilian economy, including cryptocurrency marketplaces, as well as the path of the digital real might both be impacted by the elections.
The “bitcoin news” is that Brazil has had a year of mass adoption for cryptocurrencies. The country saw an increase in the number of people using bitcoin from 1% to 4% during this time period.
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