The Brazilian cryptocurrency market was able to disengage itself from the police and win acceptance by the public in 2021.
Bitcoin (BTC), a strong alternative for the Brazilian real, ended 2021 with negative records breaking and reaching a December devaluation at 6.5%. This made it the 38th worst currency worldwide.
The biggest cryptocurrency saw a low of 167,000 real in January, and then soared to 355,000 real in May. This was a year full of ups and downs. The BRL/BTC exchange rate was hit hard by Bitcoin’s decline. It was below 200,000 reals for most of the year, but it started to climb to 367,000 real in August.
Brazilians turned to cryptocurrency when they felt the need for economic security. CoinMarketCap estimates that 10 million Brazilians are now involved in the crypto market.
The Brazilian Stock Exchange introduced exchange-traded funds (ETFs), which are linked to Bitcoin and Ether. Five ETFs are listed on B3, with some of them being among the most profitable in Brazil’s stock market by 2021.
New developments were also announced by the Brazilian Central Bank regarding the digital real (a central bank digital currency) that could be launched as soon as 2023. A dedicated team from the Brazilian Central Bank will conduct a series test to ensure that blockchain technology is integrated into their services.
The Federal Congress was occupied with discussions about the regulation and regulation of cryptocurrency in Brazil throughout the year. In December, the federal deputies passed Bill 2303/15. This bill establishes the criteria for regulation of cryptocurrency in Brazil. In 2022, the bill will be discussed further in the House’s plenary and then in the Federal Senate.
In 2021, there was tension between major players on the Brazilian cryptocurrency market. However, there were also good news.
Brazilian exchanges competed with Binance, a major crypto exchange. Exchanges from across the country collaborated with the Brazilian Cryptoeconomy Association in order to conform to Binance’s rules. These rules were established by the Brazilian Securities and Exchange Commission and Federal Revenue Service, as well as the central bank. The global exchange is still in negotiations with Brazilian regulators and financial authorities.
Related: Brazil’s green Bitcoin mining is exempted from tax
Mercado bitcoin (MB), Brazil’s largest cryptocurrency exchange — and today, one of Latin America’s most prominent crypto unicorns — has expanded its operations in Brazil, allowing it to enter the sports world. MB worked with Chiliz to make Brazilian fans’ tokens more easily accessible. This novelty was quickly adopted by Brazilian football giants like Flamengo, Internacional and Sao Paulo.
Brazil also adopted the nonfungible token market (NFT), which was widely accepted by Brazilian players in game-to-earn, collectible platforms, and arts. It was adopted by prominent Brazilian musicians, such as Zeca Baleiro and Andre Abujamra, and visual artists.
We can expect more Brazilian and Latin American companies to enter the cryptocurrency marketplace over the next year. The Brazilian Stock Exchange hopes to expand its offering of cryptocurrency-linked investments, with experts targeting decentralized finance (DeFi), NFTs and the Metaverse.
It is also important to remember that 2022 will be an election year in a country where the Bolsonaro government has suffered from low popularity and been defined by social tension. These elections will have a significant impact on the direction of Brazil’s digital real and the future of cryptocurrency markets.
Eileen Wilson –Technology and Energy
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