Gabriel Galipolo, the president of the Central Bank of Brazil, highlighted a significant increase in cryptocurrency usage in the country over the past three years, particularly stablecoins.
Growth of cryptocurrency usage in Brazil
Speaking at a Bank for International Settlements event in Mexico City, Gabriel Galipolo noted that 90% of cryptocurrency usage in Brazil is linked to stablecoins. He highlighted issues of regulation and oversight, particularly regarding taxation and money laundering.
Drex project: not a central bank digital currency
Galipolo stated that the Drex digital currency project is not a central bank digital currency. Instead, it is being developed as an infrastructure project aimed at improving credit accessibility through collateralized assets. Drex uses distributed ledger technology to settle wholesale interbank transactions and offers retail access through tokenized bank deposits.
Adoption of crypto and stablecoins in Brazil
Brazil ranks second in Latin America for cryptocurrency activity, after Argentina. From July 2023 to June 2024, crypto users in Brazil deposited about $90 billion in digital assets. In August 2024, Mercado Libre issued a dollar-pegged stablecoin to meet the growing demand for crypto trading in the country.
The growth of cryptocurrency usage in Brazil underscores the need for well-thought-out regulatory measures. Projects like Drex exemplify major financial shifts, offering new opportunities for improving banking infrastructure.
