Brazil has witnessed a significant surge in cryptocurrency adoption, with stablecoins now driving nearly 90% of digital asset transactions, according to Gabriel Galipolo, the country’s central bank chief.
Galipolo reportedly made this declaration while speaking at a Bank for International Settlements event in Mexico City on Friday, February 7. He attributed this trend to the increasing use of stablecoins for everyday payments, especially international purchases. However, he pointed out that this development poses regulatory challenges, complicating oversight and tax enforcement. He also expressed concerns regarding transparency, particularly in preventing money laundering and ensuring proper taxation.
Galipolo advocated for government initiatives as preferable alternatives. He claimed that the country’s digital currency project, Drex, is a digital payment infrastructure distinct from central bank digital currencies (CBDCs). He noted that it uses distributed ledger technology to streamline wholesale interbank settlements and facilitates tokenized bank deposits. According to him, this promotes financial inclusion because it enhances credit access by collateralizing assets.
Galipolo also highlighted Pix, Brazil’s widely adopted instant payment platform, noting its potential for seamless integration with international payment networks. He claimed the system could boost cross-border transactions across the Americas.
Meanwhile, Galipolo’s comments follow a proposal from the Brazilian Central Bank, Banco Central do Brasil (BCB), for new regulations that could significantly impact stablecoin usage in the country. The rules, announced in November 2024, seek to ban transfers of foreign-backed stablecoins, such as USD-pegged tokens, from exchanges to self-custody wallets. It specifically targets “tokens denominated in foreign currencies,” which are crucial for cross-border payments. If enacted, the rule would prevent exchanges from facilitating such withdrawals and require users to keep these assets on regulated platforms.
The Bank claimed the measure is intended to align the crypto market with traditional finance and address issues related to investor protection and financial stability.
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