Surge in Crypto Asset Usage in Brazil

(Reuters) – Brazil’s central bank chief Gabriel Galipolo stated on Thursday that the usage of crypto assets in the country has surged over the past two to three years, with around 90% of the flow linked to stablecoins.

Stablecoins are pegged to real-world assets, such as the U.S. dollar, causing them to fluctuate much less than other crypto assets like Bitcoin.

Speaking at a Bank for International Settlements event in Mexico City, Galipolo noted that policymakers view this trend as primarily driven by the use of cryptocurrencies as a means of payment, which poses challenges for oversight and regulation.

“Most of that is to buy things and to shop things from abroad,” Galipolo said, emphasizing that this usage “maintains some kind of opaque vision for taxation or for money laundering.”

He added that Brazil’s Drex is not fundamentally a central bank digital currency but rather an infrastructure aimed at improving credit with collateralized assets, especially given high local financing costs due to the limited use of guarantees.

Drex is set to utilize distributed ledger technology to settle wholesale interbank transactions, with retail access based on tokenized bank deposits.

After highlighting that payment integration has significant potential for facilitating cross-border transactions across the Americas, Galipolo also mentioned that Brazil’s widely used instant payment system Pix could enable integration with international instant payment networks due to its programmability.