Cryptocurrency Adoption on the Rise in Brazil, Says Coinext CEO
Cryptocurrency may be “out of fashion,” but it continues to attract new users to Web3 every day, especially in emerging markets like Brazil. According to José Ribeiro, the CEO of crypto exchange Coinext, Bitcoin’s perspectives, Brazil’s vibrant crypto economy, and regulatory clarity have all contributed to the growing adoption of cryptocurrencies in the country.
During the recent Web Summit in Lisbon, Ribeiro spoke with Cointelegraph’s Joe Hall about the potential of Bitcoin in Brazil and the increasing competitiveness in the country’s payments sector. Ribeiro predicts that the volume of Bitcoin transactions in Brazil will reach a record level by 2023, as more global crypto exchanges establish operations in the country, including Binance, OKX, and Coinbase.
“The competitiveness has increased considerably, which is part of the business from a crypto adoption perspective. The country has a history with inflation, and I see that interest rates are going to be down next year for sure, and we’re going to have another cycle,” states Ribeiro.
According to a recent survey by the local central bank, the benchmark interest rate in Brazil is currently 12.25% but is expected to decrease to 9.25% by December 2024. Alongside the perspective of lower interest rates, global drivers such as the approval of a spot Bitcoin ETF in the United States and the Bitcoin halving are expected to impact prices. However, Ribeiro advises the crypto community to focus on fundamentals rather than price movements.
“People just hear about Bitcoin when the price is hitting all-time highs, right? […] but people don’t talk too much about fundamentals, and the fundamentals haven’t changed since its creation,” Ribeiro explains.
Ribeiro also highlights the importance of regulatory frameworks in fostering innovation in the country. He mentions that Brazil is advanced in terms of complying with tax authorities, with monthly reports filed on transactions carried out on exchanges. Brazilian regulators are open to discussions about crypto and payments, understanding the risks associated with the industry.
“They understand about crypto, they understand about the risks of our business, which is good. I won’t say that regulation is good, but regulation is needed somehow because we definitely want some rules to be competitive in the market because we are competing with companies outside Brazil, which are not paying taxes, so we are not competing in the same manner,” states Ribeiro.
In recent years, the Brazilian central bank has implemented the PIX payment system, enabling instant payments between individuals and businesses. Users only need the key identifier of the PIX recipient, such as an ID number, cell phone number, or email address. The country is also working on its central bank digital currency (CBDC), called DREX, which is expected to be available next year. Ribeiro believes this development will elevate Brazil’s Blockchain adoption and position it as a leader in the financial market industry.
As cryptocurrency continues to gain traction in Brazil, it is clear that the country is embracing the potential of Web3 and actively working towards creating a supportive regulatory environment.
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