Accepted as a legal tender by some, banned or restricted by several others, and regulated by a few, more than 7,500 different cryptocurrencies are traded publicly.
Regardless, cryptocurrencies are still banned and considered illegal in many countries including Nepal and Macedonia. However, the good news for crypto users is that the digital asset can be traded in major countries such as Canada, UAE, the USA and Germany, among others.
Likewise, cryptocurrency is gaining a lot of footholds – particularly in Brazil. Notably, Roberto Campos, the governor of the Central Bank of Brazil revealed that Brazilians own around $40 billion in crypto assets. With this much ownership in crypto, you might be wondering just exactly what to spend the virtual asset on in Brazil. Read on to find out.
History of cryptocurrency in Brazil
Brazil not only boasts of being the largest country in both South America and Latin America, but also the richest country in Latin America, as well as the most populated. The country has one of the biggest cryptocurrency markets in Latin America, with more than 100,000 BTC traded daily.
The Central Bank of Brazil released a report in October that showed Brazilians have purchased more than $4 billion in cryptocurrency imports since the start of the year, which is a huge number and has an increased likelihood of doubling its worth next year. What’s more is there is an estimate that over 10 million people – 5% of Brazil’s total population – presently own cryptocurrency.
Institutional and retail traders alike are stampeding into cryptocurrency, especially since the Brazilian Securities and Exchange Commission approved two cryptocurrency ETFs — one 100% Bitcoin and the other composed of five cryptocurrencies, in addition to Bitcoin earlier in the year.
Legality of crypto
The use of virtual currencies, such as Bitcoin, to facilitate payments or as an investment is the outcome of an agreement between the parties to each transaction and this runs the risk of capital loss risk, price variation and even fraud. Thus, the Central Bank does not recognise virtual currencies as official currencies.
The country passed a bill to regulate Bitcoin and other cryptocurrencies in September. The bill lays out a framework to make investing easier with safeguards against hackers, scammers, and money launderers.
On August 26, the Central Bank of Brazil (Bacen) officially recognised Bitcoin and cryptocurrencies as legal monetary assets. With this, the country imposed a 15% capital gains tax at the time of sale.
In November 2021, a proposed bill to use cryptocurrency as a form of payment for workers in the public and private sectors was tabled before parliament. If the bill does get cleared, things could greatly change for the massive crypto nation.
Applicable usage of crypto in Brazil
The majority of cryptocurrency holders do so to protect themselves against inflation and economic instability. Moreover, Bitcoin is used by numerous Brazilian entrepreneurs and gamers to conduct perfectly legal transactions.
What can I buy in Brazil with cryptocurrency?
Corporate organisations in Brazil are embracing the new reality, with many now receiving cryptocurrency as a means of payment. More prominently, you can buy movie tickets at Cine Multi using cryptocurrency.
If you have a wallet, you could also stroll into a McDonald’s in Brazil and pay with Bitcoin. Burger King in Brazil began accepting Dogecoin as a payment mechanism for the fast-food chain’s Dogpper – a snack for dogs – in the second quarter of this year.
Ultimately, cryptocurrency is fast gaining traction in Brazil, with more people creating crypto trading accounts than traditional brokerage accounts. If legalised, Brazilians will be able to enjoy all of its benefits to the fullest.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.