Cryptocurrency Adoption in Emerging Markets: Brazil

Validated Media

Demand for new ways of value storage is often connected to economic happenings and citizens taking matters into their own hands. In recent years, many people have been turning to cryptocurrency to find solutions to the current flawed financial system. According to blockchain analytics firm Chainalysis, emerging markets are consistently at the forefront of global crypto adoption. But does this mean crypto adoption is proving to be more successful in emerging markets and if so, why? And how exactly can crypto adoption offer real, long-lasting solutions?

Brazil’s Financial Inclusion Boom

The South American country of Brazil is the fifth most-populated place on Earth and its 214 million citizens account for one-third of Latin America’s population. Over the past ten years, financial inclusion in Brazil has skyrocketed, with digital payments establishing an innovative financial ecosystem throughout the country. Brazil has reduced its unbanked population by an impressive 73%. This progress is the result of a combination of new regulatory framework for digital payments, intensive use of technology, entrepreneurship and a focus on creating products that really address the needs of customers. Nubank, founded in São Paulo in 2013, is one of the largest digital banking platforms in the world. Recent data shows that Nubank has opened access to the financial system for 5.6 million people who never previously had access to banking services. Brazil’s financial inclusion boom is largely supported by a pro-innovation regulatory landscape and fostered by the country having one of the highest internet and smartphone adoptions in the world. As of today, 1 in 3 Brazilians are using app-only fintech banking services. Nevertheless, the government needs to further assist in this effort to truly make financial services accessible to all.

According to a survey by Locomotiva Institute, around 16.3 million people in Brazil are still unbanked and another 17.7 million are under-banked, meaning they have little or not entire access to the products and services available on the market. Minimum balance requirements for bank accounts and service fees were often barriers for people living in poverty. Lack of official forms of identification or considerable distance to financial institutions or banks were also frequently cited as a disadvantage. Brazil hosts one of the most profitable banking industries in the world, where the top five banks control almost 80% of the loan market. This has made banking expensive, with consumers sometimes paying triple-digit interest rates. 49% of citizens said they don’t necessarily trust or feel comfortable with their banks and think banks aren’t interested in helping people with little or no money. Whilst more needs to be done to make sure banking and digital payments are inclusive to all, it is interesting to see how innovative regulatory frameworks and supporting country-own FinTech companies have led to a boom in financial inclusion. The openness to new technology and a digitally-savvy population no doubt provide opportunities for new digital currencies to support the current financial system and build new pathways for financial inclusion and independence.

Cryptocurrency Adoption in Emerging Markets

Emerging markets are consistently at the forefront of global crypto adoption. “One reason for this could be the value that users in emerging markets get from cryptocurrency. These countries dominate the adoption index, in large part because cryptocurrency provides unique, tangible benefits to people living in unstable economic conditions,” the Global Adoption Report states ( Kim Grauer, Director of Research at Chainalysis, further supports this research: “We found that a lot of people simply don’t have the same level of access to investments and instead turn to crypto offerings. We see that a lot in emerging markets, where there’s a young, tech-savvy population who are starting to have disposable income” ( Cryptocurrencies are seen by many as a safe haven, especially in periods of economic pressures. Despite weaker public sentiment on cryptocurrencies in the current bear market, demand has remained resilient in emerging economies.

Brazil ranks first of Latin American countries by cryptocurrency value received: Chainalysis, Geography Of Cryptocurrency Report

Latin America remains a diverse region in terms of cryptocurrency use cases, but Chainalysis’s research shows that adoption still follows the same general trend. Unlike India, where many are turning to applications like NFTs, adoption in Latin America is largely driven by more traditional crypto assets offered through exchanges and financial technology platforms and innovations. Brazil is among the leaders in DeFi adoption in the region. Whilst the focus lies on using cryptocurrency technology and value storage, Brazil has the fifth largest Axie Infinity player base worldwide. Axie Infinity attracts gamers with rewards and led to the creation of organisations that would pay for the cost of playing in exchange for a cut of players’ winnings. The game collapsed earlier this year after it got hacked for over $600 million, but this didn’t stop the hype. Players — especially in emerging markets — consistently utilise play-to-earn games as a source of income. Interest rates are at an all-time low in the country, inflation is increasing and many Brazilians are using this opportunity to invest in cryptocurrency.

Cryptocurrency in Brazil Today

Brazil is currently one of the top five countries with the highest number of crypto investors. According to the latest KuCoin report, 16% of Brazil’s population, approximately 34.5 million people, are considered crypto investors. 62% of Brazilian cryptocurrency investors believe crypto to be the future of finance, while 53% regard digital currencies as reliable value storage ( The country is also home to some of the region’s most innovative fintech companies, such as e-commerce giant Mercado Libre, which launched a crypto exchange and its own token through its payment tool Mercado Pago. Cryptocurrency exchanges are interested in the Brazilian market as well. Coinbase announced the creation of an engineering hub in Brazil in late 2020. Binance also voices its interest in the country: “It is a key strategic market for Binance, for sure. It is the largest market in Latin America in all metrics and with enormous potential; and it is also very important for the company globally” ( The government no doubt sees the benefits of early cryptocurrency adoption to bring business and jobs to the region and strengthen the economy.

Cryptocurrency assets are not yet regulated in Brazil, but a proposed bill on cryptocurrency regulations is currently being discussed by the Chamber of Deputies. The bill is set to provide additional security for investors and improve oversight of crypto-related companies. The Brazilian Securities and Exchange Commission said the guidelines will not interfere with the industry but rather support innovation processes and establish more security and reliability. Cryptocurrency gains — as of 2022 — are considered movable goods from a tax perspective and thus subject to capital gains tax. The Central Bank of Brazil is optimistic about the forthcoming crypto regulations and sees opportunities to transform the financial services market and create a more inclusive digital economy. It is exciting to see how cryptocurrency adoption in Brazil has been led by innovative regulations that support and encourage FinTech businesses in Brazil. Government interest and supporting regulations will no doubt make cryptocurrencies an efficient and solid investment and payment option in Brazil and many other countries worldwide.

(By Tina)


All Comments

Recommended for you

  • Binance Bitcoin U-margin contract K-line chart has returned to normal display

    On September 29th, it was reported that the issue with the Bitcoin U Futures Contract K-line chart on the Binance platform has been resolved and is now displaying normally. Earlier today, around 16:15, the Binance platform displayed that the Bitcoin U Futures Contract had multiple spikes to the $2707 position within a 15-minute period.

  • Hong Kong and Macao police jointly arrested 4 people this week in connection with the JPEX case and seized or frozen 24 million Hong Kong dollars in assets.

    With regards to the JPEX virtual asset trading platform case, the Hong Kong police have received 2,417 reports, involving a total amount of over HKD 1.5 billion. Assistant Commissioner of Police, Chung Yung-min, stated that the Hong Kong police carried out a joint operation with the Macau Judiciary Police from Tuesday to Thursday this week, arresting four people and seizing or freezing HKD 24 million in assets, including casino accounts and a large amount of cash. She also said that the police are actively tracing the whereabouts of virtual assets, have identified other targets, but some have left Hong Kong. The police will work with international cooperation to arrest those involved. She pointed out that the JPEX fraud network is very large and complex, and the investigation is still in its early stages. Those involved still insist that it is a legitimate investment platform. She hopes that the public will be more cautious when making any decisions regarding JPEX. Chief Superintendent of the Cyber Security and Technology Crime Bureau, Cheng Lai-ki, said that the criminal group has destroyed many documents, making it difficult for the police to track the fraudulent funds and investigate. However, she emphasized that the police will continue to communicate with overseas trading platforms to trace the whereabouts of virtual assets. A total of HKD 5 million worth of encrypted currency assets have been frozen temporarily. 

  • Valkyrie Ethereum Futures ETF Receives U.S. SEC Approval

    The US SEC has approved Valkyrie to convert its existing Bitcoin futures ETF to a Bitcoin and Ethereum futures ETF. The new fund will be renamed "Valkyrie Bitcoin and Ethereum Strategy ETF" and will take effect on October 3, with the code still being BTF.

  • AlphaSense Raises $150M in Series E Funding Round Led by BOND and Alphabet's CapitalG

    AlphaSense, a B2B AI platform focused on business intelligence and search, has completed a successful Series E funding round, raising $150 million. The round was led by BOND and included investments from Alphabet's CapitalG, Goldman Sachs, and Viking Global. AlphaSense's valuation has grown from $1.7 billion to $2.5 billion since its Series D funding round in June 2023. The platform uses machine learning to provide deep insights into business and finance analytics, offering "insights-as-a-service." The latest investment will allow AlphaSense to continue leading the generative AI revolution in the B2B sector.

  • web3 startup IYK raises $16.8 million in seed funding, led by A16z Crypto

    Web3 startup IYK has raised $16.8 million in seed funding, with A16z Crypto leading the way and other investors including 1kx, Collabcurrency, Lattice Capital, and gmoney. According to its website, IYK is a participant in the a16z Crypto Startup School, which is an accelerator program from the venture capital giant that typically invests $500,000 in participating startups in exchange for 7% equity. IYK says that it has recruited over 100 creators from industries such as fashion, music, and art since its founding in 2021. To attract more brands and creators, it is launching a self-service platform to help create digital physical experiences.

  • Oracle project Supra completed over US$24 million in financing, with participation from Animoca Brands and Coinbase Ventures.

    On September 28th, Supra, a provider of oracle and VRF services, announced that it had completed a funding round of over $24 million. Investors in this round include Animoca Brands, BCW, Coinbase Ventures, FiveT Fintech (formerly Avaloq Ventures), Galaxy Interactive, Hashed, HashKey, Huobi Ventures, No Limit Holdings, Prosus Ventures,, Republic Crypto, Shima Capital, Signum Capital, SMO Capital, Sound Ventures, Sublime Ventures, UOB Venture Management (Dahua Bank), and Valor Equity Partners.

  • Hong Kong police arrested three people again in connection with the JPEX case, bringing the total number of arrests to 15

    Hong Kong police arrested three more people related to the JPEX case, including one director and one employee of the overseas exchange Lupin, and one popular analyst from a foreign currency exchange shop. The total number of arrests is now 15. The police have received a total of 2,392 reports, involving a total amount of nearly 1.5 billion yuan, and have frozen 77 million yuan in assets. 

  • The EU will collect data proving that cryptocurrency PoW mechanisms "seriously" harm the environment and plans to develop sustainability standards

    On September 28th, the European Commission released a tender contract worth 800,000 euros (approximately $842,000) aimed at mitigating the "significant harm" that cryptocurrency poses to the environment. The research, which will end on November 10th, will establish standards that will be incorporated into potential future EU policies to curb the impact of cryptocurrency on climate change and develop new energy efficiency labels for blockchain. The European Commission stated in the tender document that "there is evidence that crypto-assets can cause significant damage to the climate and the environment," which could undermine the EU's greenhouse gas reduction targets, indicating that new sustainable development standards may be adopted in the future. EU legislators are concerned about the energy-intensive PoW consensus mechanism that supports blockchain such as Bitcoin. The EU's research will be completed within a year and will study green issues related to the use of water, waste, natural resources, and energy by cryptocurrencies. (CoinDesk)

  • Brazil’s cryptocurrency trading volume in July was US$3.7 billion, with USDT trading accounting for 81.6%

    According to data from the Federal Tax Authority, cryptocurrency transactions in Brazil reached 18.8 billion Brazilian real (approximately 3.7 billion US dollars) in July, a decrease of 11.4% compared to the previous month. The three highest transaction volumes were stablecoins, with USDT accounting for 15.3 billion Brazilian real, or 81.6% of the total transaction volume, followed by USDC (838 million Brazilian real) and Brazilian real stablecoin BRZ (641 million Brazilian real). 

  • European crypto fund Eureka partners completes $40 million in fundraising

    European encryption fund Eureka Partners has raised $40 million, with full participation from Nordic Venture Innovations AB. The funds raised by Eureka Partners will be used to accelerate its development in the blockchain and cryptocurrency fields.