Brazil warms up to crypto: Institutional investors welcome the crypto market as the population wakes up to blockchain’s potential
Institutional investors in one of the Americas’ largest economies are signalling solid moves to incorporate cryptocurrencies into their agendas, as Brazil becomes fertile ground for crypto. In a country with much inequality but significant potential for growth, digital currencies have double the appeal for its heterogeneous population: an investment for the middle class, and a gateway into the financial ecosystem for the unbanked or those of lower socio-economic status.
Grupo XP, the largest independent brokerage in Brazil, launched on its cryptocurrency exchange Xdex for Bitcoin and Ethereum on Tuesday 9th. XP has grown over the last few years by targeting Brazil’s middle class with offers of online investment platforms.
CEO Guilherme Benchimol has recognised the need to incorporate cryptocurrencies to the firm’s trade, saying they felt ‘obligated to start advancing in this market’, as he highlighted that around 3 million Brazilians have exposure to Bitcoin, providing a huge opportunity compared with the figure of around 600,000 that invest in stock.
Despite reluctance from the conservative banking sector in Brazil, the crypto frenzy is indeed gaining traction in the country thanks to its ability to offer individuals empowerment over their own finances. More than just a form of investment, cryptocurrencies pose feasible alternatives to the lower classes in Brazil who are financially excluded from the banking system.
Developing economies across the globe still present high rates of financial exclusion and interest rates, a gap which has been addressed by fintech companies that are deploying blockchain to create a more inclusive financial system, challenging the way traditional banking works.
Leading UK blockchain company Online Blockchain plc (OBC) is launching multiple tokens in Latin American and Asian emerging markets as part of their strategy of exploring the cryptocurrency potential in such markets. Over the first half of 2018, Online Blockchain launched Buenos coin in Argentina, Brazio in Brazil and Manila Coin in the Philippines.
CEO of Online Blockchain, Clem Chambers, highlighted the opportunity for tech companies to create a revolution: “OBC is applying the tried and true strategy of thinking globally but acting locally. We are looking at different opportunities for crypto projects locally where we see a need and a community to serve, such as the Philippines and South America.
Emerging markets have always had challenges with their financial infrastructures. South America has 40% less banking per head than Europe and even advanced Brazil has 20% less banking per head than Europe and the US. Cryptocurrencies and blockchain can give emerging economies a chance to leapfrog the legacy issues and the opportunity to steal a march on G7 countries forever hijacked by their bankers,” Chambers added.
OBC’s Brazilian coin, launched in May, is now listing on SouthXchange, bringing cryptocurrencies one step closer to being considered mainstream in South America’s emerging economies. Brazio was designed to enable the people of Brazil to create their own financial infrastructure with a fair, self-governing, decentralised network.
The company hopes that Brazio will be “an exemplar for the standards by which cryptocurrencies are implemented for the good of developing and unbanked countries.“
“Brazio employs all of the robust features of the bitcoin blockchain, such as excellent security, fast transactions and decentralised governance, but has been customised and improved with the interests of the Brazilian people and economy in mind,” said Oscar Chambers, Lead Developer of Brazio.