YEREVAN (CoinChapter.com) — Stablecoins dominate Brazil’s cryptocurrency market, with 90% of crypto transactions tied to these digital assets. Gabriel Galipolo, the president of the Central Bank of Brazil, revealed this statistic during a Bank for International Settlements event in Mexico City. According to a Reuters report, digital asset use in Brazil has grown significantly over the past three years.
Galipolo noted that the widespread use of stablecoins for payments presents challenges in areas like taxation and money laundering. These regulatory and oversight issues require attention as stablecoins become a central part of Brazil’s financial system.
Drex Digital Currency Is Not a CBDC, Says Galipolo
Gabriel Galipolo clarified that Brazil’s Drex project is not a Central Bank Digital Currency (CBDC). Instead, Drex is an infrastructure project designed to improve access to credit using collateralized assets.
The project uses distributed ledger technology for wholesale interbank transactions, while retail access relies on tokenized bank deposits. Drex is intended to upgrade the real-time gross settlement system, Sistema de Transferência de Reservas (STR).
On Oct. 14, 2024, the Central Bank of Brazil announced that it was testing Drex for tokenization and decentralized finance (DeFi) capabilities. It also tested Drex’s integration with other financial networks. Fábio Araújo, Drex coordinator, described the project as an upgraded version of STR but noted that more development is required before implementation.
BC Drex Pilot Regulations Phase 2 BCB Resolution 423 2024. Source: Central Bank of BrazilBrazil’s $90 Billion Crypto Market Dominated by Stablecoins
Brazil is one of the most active cryptocurrency markets in Latin America, second only to Argentina. Between July 2023 and June 2024, crypto users in Brazil deposited $90 billion in digital assets, according to a Chainalysis report released on Oct. 9, 2024.
Latin America Crypto Adoption by Country Chart 2024 Source: ChainalysisThe report highlighted that stablecoins accounted for 59.8% of the total transaction volume during this period. The remaining transactions involved Bitcoin, Ether, and altcoins. The popularity of stablecoins has continued to grow, driven by their use in payments and e-commerce.
In August 2024, Mercado Libre launched a dollar-pegged stablecoin, “Meli Dollar,” in Brazil. The move aimed to meet the rising demand for digital assets in the country.
Regulatory Challenges Linked to Stablecoin Use in Brazil
The adoption of stablecoins in Brazil raises regulatory challenges, especially around taxation and money laundering. Gabriel Galipolo highlighted these concerns, noting the need for oversight as stablecoins become more widely used for payments.
Stablecoins are also reshaping the global financial landscape. According to a Jan. 31 report by CEX.io, the annual transfer volume for stablecoins reached $27.6 trillion in 2024, surpassing the combined transaction volumes of Visa and Mastercard.
As stablecoins dominate crypto transactions in Brazil, authorities face the task of balancing their benefits with effective regulatory measures.
The post Stablecoins Dominate Brazil’s Crypto Market: Central Bank Chief first appeared on Coinchapter.
The post Stablecoins Dominate Brazil’s Crypto Market: Central Bank Chief appeared first on Coinchapter.
