#158: Musk stands down in X fight against Moraes

Plus: Brazilians need access to derivatives, says OKX; USDC now available via Pix

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Olá pessoal!

Welcome back to ????Brazil Crypto Report for the week of September 16-20, 2024.

Elon Musk appears to have backed down in his skirmish with Brazilian Supreme Court justice Alexandre de Mor?es. The X platform has reportedly paid its outstanding fines to the Brazilian government, appointed a new legal representative and removed the pro-Bolsanaro user accounts that the court had ordered banned.

This news comes after the X service briefly became available in Brazil last Wednesday after apparently switching network providers to Cloudflare. Soon after the change, however, Cloudflare began to isolate traffic to the X site so that Brazilian internet service providers could block X without blocking the rest of the internet.

However, as I write this Sunday evening, Brazil remains without access to the X platform.

??What’s in BCR this week?

• Circle enables direct purchases of USDC in Brazil
• Brazilian Central Bank, SERPRO, Rayls join Linux Foundation Decentralized Trust
• Febraban says Tradfi should lead Brazil’s crypto and token revolution
• OKX says Brazilians need access to crypto derivatives
• Brazilian fintech unicorn EBANX nx eyes Drex, stablecoin market

Thanks for reading and have a great week!

-AWS

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??New podcast!

This week I talked to Guillermo Goncalvez Espiga and Alessandro C. of El Dorado , which is a peer-to-peer stablecoin marketplace focusing on remittances and cross-border payments in Latin America.

Since launching in 2021, more than 250,000 users from Argentina, Brazil, Colombia, Panama, Peru and Venezuela have executed 2.3 million USDT transactions on Tron using El Dorado. Further, the platform now has integrations with 70 payments apps across the region.

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Circle enables direct purchases of USDC in Brazil

Circle has enabled direct conversion of USDC in Brazil, removing the need to first convert BRL into USD. Corporate customers and businesses can now access USDC directly from local financial institutions in Brazil via Pix.

The company said in a statement:

"Circle now supports local bank transfers via PIX and SPEI, the national real-time payment systems in Brazil and Mexico, respectively…Eliminating international wires can drastically reduce the time it takes to access USDC – from days to just minutes, releasing capital trapped in the lengthy settlement processes."

The Block CoinDesk CoinTelegraph Brasil Portal do Bitcoin

Central Bank, SERPRO, Rayls join LF Decentralized Trust

The Banco Central do Brasil , Serpro and Rayls Foundation are among the 100 founding members of the The Linux Foundation Decentralized Trust.

The Trust is a new umbrella organization designed to foster collaboration and innovation across a variety of ecosystems including blockchain, ledger, identity, interoperability, cryptography and more.

Daniela Barbosa , General Manager of Decentralized Technologies at the Linux Foundation and Executive Director of LF Decentralized Trust, said in a statement:

“LF Decentralized Trust is the new home for collaboratively developing the ecosystems that will make these trusted systems and applications. We are launching with a powerful mix of ledger, identity, cryptography, interoperability, and implementation projects and a diverse, committed membership base. And we are just getting started. Our mission is to drive collective innovation that delivers transparency, reliability, security, and efficiency on a global scale.”

Other Brazilian members of the group include GoLedger and the Center for Research and Development in Telecommunications (CPQD).

To learn more, I encourage you to revisit this interview I recorded with Daniela back in June.

BeinCrypto Exame BlockNews

FEBRABAN : Tradfi should lead Brazil’s crypto and token revolution

A new report on emerging technologies produced by Febraban and Accenture argues that Brazil’s Tradfi banks and financial institutions should lead the charge on cryptocurrencies and RWA tokenization.

The report suggests that banks are in a privileged position to lead in these areas due to their established reputations and existing infrastructure, as opposed to “lower confidence” crypto-native companies.

The report states:

“Despite the constant technical evolution and the potential to generate benefits, Blockchain faces challenges for implementation as an institutional solution. Crucial issues such as privacy, standardization and transactional cost x performance need to be addressed technically.”

It also argues that instead of seeing these new technologies as a threat, banks should embrace them as a way to improve their products and services.

The Febraban report adds that RWA tokenization is a critical area of focus for Brazilian banks

"Recent market analyzes indicate that despite slower than expected growth, asset tokenization is on its way to achieving a global trillion market by 2030, excluding StableCoins, CBDCs and tokenized deposits."

CoinTelegraph Brasil Livecoins BeinCrypto

Brazilian fintech unicorn Ebanx eyes Drex, stablecoin market

Eduardo de Abreu , vice president of product at the retail payment company, said that he is keeping a close eye on the Drex development process and trying to stay involved in the discussions.

"Drex has the potential to create a more dynamic and safe ecosystem, fully aligned with the demands of our customers in the 29 countries where we operate…We make a point of involving in these processes to help develop new technologies and understand how they will impact our business and our customers.”

He added that the growth of stablecoins for payments and shipments has caught the attention of the company, and that he sees the implementation of a system like Drex as complementary to Pix.

CoinTelegraph Brasil

OKX: Brazilians need access to crypto derivatives

In an interview with Exame, Guilherme Sacamone , OKX ’s Brazil country director, said that Brazilian crypto users deserve access to derivatives and that he’s optimistic that there’s a unique moment for Brazilian regulators to better understand these products.

"I would love to see the Brazilian tends to access derivatives in crypto…If you remove derivatives, it essentially puts investors in a precarious position on investors on the other side of the world.”

Crypto derivatives trading is currently prohibited in the country, a dynamic that brokerages with local entities puts them at a competitive disadvantage vis-a-vis global players that aren’t established locally.

Sacamone emphasized that OKX is trying to maintain a close relationship with regulators, but noted that there are certain conditions that need to be fulfilled before the exchange can invest more locally now that it has finished “tropicalizing” its core product suite for the local market.

“It's the type of investment in Brazil that demands an evolution of the regulatory environment. Many global exchanges today prefer to act without an entity to continue offering products without regulation."

He added that, overall, OKX’s rollout in Brazil was faster than expected despite taking a relatively conservative approach. OKX’s app has seen high volumes of downloads compared to other local crypto apps (highest of any crypto app during September), that OKX has among the best prices for BTC and ETH in Brazil and trading volume has expanded significantly, Sacamone explained.

Next steps for OKX include rolling out new products tailored to the Brazil market, and intensifying its expansion efforts in Latin America.

??Brazil Crypto News Rundown

?? Markets

• Brazilians are opting to spend less on food, beverages and clothing in favor of online betting, according to several new industry studies. A Santander report estimates that between 1.9% and 2.7% of household income in 2023 went to online betting houses, up from 0.8% in 2018. Meanwhile, a survey by the Brazilian Society of Retail and Consumption saw 23% of respondents they had reduced spending on clothes in order to bet, 19% reduced spending on both food and travel. (BlockTrends)
• The BRLA Digital stablecoin has become the leading BRL-pegged stablecoin in terms of trading volume, according to CoinGecko . (Finsiders)
• Brazil has become one of the largest “fan token” markets in the world, Chiliz country manager Bruno Pessoa told CoinTelegraph Brasil. The country now represents 22.5% of Socios.com’s global user base.
• Bybit Fintech Limited is launching a credit card in Brazil with cashback of up to 10%. (BeinCrpyto)
• Binance Brasil ’s VP of Latam Guilherme Nazar argued that to best protect investors, Brazil’s crypto regulatory framework must allow Brazilian investors to have the same access to liquidity (ie global order books), transparent pricing and security as investors from other parts of the world. In a column for Valor Investe, he wrote:

Local regulations that conflict with those being practiced abroad would undermine the very purpose of protecting users and ensuring market integrity.

• Nazar’s column also argued that applying copy and paste Tradfi solutions to concepts like asset segregation in crypto may not always yield desired results:

Requiring independent custodians or segregation of activities at different levels within providers may not necessarily represent a higher level of security or asset protection, while also resulting in higher fees for the end user and slow transactions due to the procedures inherent to the blockchain. Any regulation regarding the management of wallets (whether hot or cold) needs to be guided by the DNA of the digital asset ecosystem in order to guarantee access to the global trading market.

• MB | Mercado Bitcoin 's expansion into Portugal has proved fruitful, particularly the ability to offer European investors higher interest rate fixed income products from Brazil. (BeinCrypto)
• Crypto traders on Polymarket are placing bets on who will win Sao Paulo’s upcoming mayoral election, but this is causing tension as wagering on elections is illegal in Brazil. (Livecoins)

?? Adoption

• Crypto friendly bank Z.ro Bank is now providing financial services to more than 20 online betting sites operating in the country currently. (Games Magazine Brasil)
• Brazil’s crypto community is expressing concern over the inability to access X/Twitter following the nationwide ban enacted last month. The platform is seen as a critical source of information for those involved in the industry. (Cryptonews)
• Nuclea’s Cesar Kobayashi explains how Núclea is integrating the Web3 world with settlement, registration and interoperability via its Nuclea Chain. (BlockNews)
• Singer Luan Santana partnered with Wibx Company to launch a superapp called Luperyum that aims to unite the artist, fans, brands and services under a single umbrella. (CoinTelegraph Brasil) (BeinCrypto)
• Nubank and Grupo Foxbit users will soon be able to send money across borders via the Bitcoin Lightning Network using Lightspark’s Universal Money Address protocol. Nicolas Cabrera , VP of products at Lightspark , told CoinTelegraph Brasil:

“If you have a bank account in Brazil and want to receive money from someone in the US, the address facilitates this exchange of money between coins and countries…What we do is convert the Brazilian real to bitcoin, which crosses the border, and then the receiver can choose whether to convert back to dollars or maintain bitcoin.” (Valor)

• Drex should reduce frictions in the buying and selling of assets like automobiles and real estate, banco BV head of digital assets Jo?o Gianvecchio explained in an interview with Exame.
• The fourth annual BitSampa event is happening October 5 in Sao Paulo.
• The Minas Gerais government launched the first-ever blockchain based unified medical record. (CoinTelegraph Brasil)
• Neymar’s X/Twitter account was hacked by scammers promoting a Solana memecoin. (Portal do Bitcoin) (BeinCrypto)
• Brazil ranks 11th globally in the development of artificial intelligence, according to global statistics and education company SAS. (CoinTelegraph Brasil)
• More than 1.7 notarizations have been performed through the Hyperledger-based e-Notariado electronic platform. (CoinTelegraph Brasil)

?? Policy, Regulation and Enforcement

• Brazilian digital bank Capitual had millions of stablecoin USDT blocked resulting from a request from Federal Police, most likely related to the Operation Niflheim (covered last week). The company is facing difficulties in carrying out liquidations, according to a statement sent out to fintech partners. (Livecoins)
• Former Corinthians footballer Jucilei lost R$45 million (US$8 million) in the Rental Coins crypto pyramid scheme operated by “Sheik of Bitcoins” Francisley Valdevino, according to a new report from Federal Police. The scam involved a an Uruguayan actor posing as the fake CEO of the company. Fantastico reported. The report also revealed that the Sheik may have run a separate investment scam targeting investors in the US. (CoinTelegraph Brasil) (CriptoFacil) (InfoMoney) (BlockTrends) (Livecoins)
• The Ministry of Justice and Public Security will intensify training courses for civil police officers to identify and track crimes committed using digital currencies. (Valor)
• Rio de Janeiro’s Leblon neighborhood has seen an uptick in robbery attempts aimed at stealing users’ crypto wallets and private keys. (CoinTelegraph Brasil)
• Banks, fintechs and other institutions that offer Pix must make scam alert tools available to customers in case of atypical transactions. (CoinTelegraph Brasil)
• Financial pyramids continue to be the most reported crime by the CVM to authorities, according to the securities regulator’s Sanctioning Activity Report. The report also anointed bitcoin pyramid Atlas Quantum as one of Brazil’s largest ever financial scams. (Portal do Bitcoin) (Livecoins)
• Binance launched a new web page in Portuguese language designed to help investors detect and avoid cryptocurrency scams. (CoinTelegraph Brasil)
• Brazil’s Central Bank has returned almost R$1.1 billion (US$200 million) to victims of Pix fraud since November 2021. (CoinTelegraph Brazil) (BeinCrypto)
• The CVM, Brazil’s securities regulator, filed a lawsuit against Canis Majoris, Gr Bank, Discovery Bank and several individuals after investors accused them of operating cryptocurrency pyramid schemes. (Portal do Bitcoin)
• There are still several challenges standing in the way of VASP regulation in Brazil. (BlockNews)