- Brazil’s cryptocurrency adoption has surged, with activity up 24% compared to the previous year.
- The weakening Real and high inflation rates drive Brazilians towards stablecoins and other cryptocurrencies.
- Institutional investors like BTG Pactual are significantly contributing to the growing crypto market.
Brazil, the country known for football and samba might become known for its cryptocurrency adoption real soon.
A recent report from the Brazilian Finance Ministry under the National Federal Revenue Service revealed that Brazilians bought and used cryptocurrency assets by 24% more than the previous year.
The report also showcases that Brazilian monthly crypto activity per user averages over 6 million people and 30,000 companies since January of this year. The nation’s monthly crypto trading volume went as high as $6 billion in March of 2024.
Crypto adoption in the region is not only driven by the people. Now more than ever, institutional investors are also making the jump from fiat to crypto. “BTG Pactual” – one of the largest investment firms in South America – holds over $108 million in cryptocurrencies.
Alongside Argentina, Brazil is creating a thriving environment for crypto adoption, even hosting the debut of the first Solana ETF in the world. This hasn’t gone unnoticed as exchanges and other crypto firms are setting up offices in the country, partnering with traditional payment institutions, and integrating an innovative blockchain ecosystem in Brazil.
Brazil Adopting Stablecoins to Protect From a Weakening Real
During the last decade, Brazilians have been dealing with an increasingly weaker national currency. Since 2014, the Brazilian Real has devalued by 165% compared to the U.S. Dollar.
Adding to that, inflation rates have been on the verge of becoming unpleasing, averaging 4.4% yearly. The country also deals with the second-highest Central Bank interest rate in the world at 10.5%, only behind the at-war Russia.
The economic hardships in the nation do not stop there. After taking office in January 2023, the more left-leaning President Lula was expected to control interest rates and forego the extremely hard federal spending limit by the Government.
However, not only was that not the case, but its Economy Minister Fernando Haddad has recently announced intentions of decreasing or changing the way payments are made to a social security welfare program to the elderly poor, which would likely result in more cuts to the program.
With all this economic uncertainty, it is clear why Brazilians are turning to crypto to protect their investments from inflation. The favorites among them, Bitcoin and stablecoins like USDT offer the people a more stable option to safeguard investments, when compared to the volatility of the national currency.
