Throughout 2021, Cryptocurrency Market Is More Acceptable In Brazil

Brazilian society's acceptance of crypto is getting better. (photo: doc. Unsplash)

JAKARTA – Throughout 2021, the Brazilian cryptocurrency market managed to stay out of the reach of the police and finally win acceptance with the general public, whether in financial markets or even in the country's greatest national passion: football.

Last year, Bitcoin (BTC) acted as a strong alternative to the Brazilian Real which in 2021 broke negative records and hit a 6.5% devaluation in December. As a result of this devaluation, the Brazilian Real became the 38th worst currency in the world.

In a year of ups and downs Bitcoin, the largest cryptocurrency hit a low of 167.000 rials in January and surged along with global markets to 355.000 rials in May. Faced with Bitcoin's decline, the BRL/BTC pair stuck below 200,000 rials through August, when it started climbing to a new record high of 367.000 rials on November 8.

Faced with the need for economic protection, Brazilians turned to crypto. According to CoinMarketCap, 10 million Brazilians are now participating in the crypto market.

In traditional financial markets, the Brazilian Stock Exchange, debuted an exchange-traded fund (ETF) linked to Bitcoin and Ether (ETH). There are already five ETFs listed on the Brazilian Stock Exchange, some of which are positioned among the most profitable in the entire Brazilian stock market in 2021.

The Central Bank of Brazil also announced a new development in digital realism, the central bank digital currency (CBDC), which could be launched as early as 2023. The Central Bank of Brazil also announced that it will continue to work to incorporate blockchain technology into its services, by conducting a series of tests via special team in the monetary authority.

At the Federal Congress, discussions on cryptocurrency regulation in Brazil took place throughout the year, until in December, federal deputies approved Bill 2303/15, which establishes criteria for cryptocurrency regulation in the country. The bill will be further discussed in 2022 in the plenary session of the Brazilian House of Representatives and then in their Federal Senate.

There is tension among the major players in the Brazilian cryptocurrency market in 2021, but also some good news.

The Brazilian exchange goes head-to-head with major crypto exchange Binance. Exchanges across the country working with the Brazilian Cryptoeconomy Association have forced Binance to follow the rules set by the Brazilian Securities and Exchange Commission, the Federal Revenue Service, and the central bank. The global crypto exchange is still negotiating with Brazilian market regulators and the country's financial authorities.

On the other hand, Brazil's largest exchange, Mercado Bitcoin (MB) — today one of the crypto unicorns in Latin America that continues to expand its operations in the country, has entered the world of sports once and for all.

MB is also working with Chiliz to make fan tokens more accessible to Brazilian fans, a novelty adopted by national football giants such as Corinthians, São Paulo, Internacional, Atlético-MG, and Flamengo.

As reported by Cointelegraph, The nonfungible token market (NFT) is also reaching Brazil with the widespread adoption and presence of Brazilian players in play-to-earn games, collectibles platforms and even in art, adopted by visual artists and well-known names in the Brazilian music scene such as André Abujamra and Zeca Baleiro.

For next year, the public can expect even more large Brazilian and Latin American companies to enter the cryptocurrency market. The Brazilian Stock Exchange hopes to expand its cryptocurrency-related investment offerings, while experts target decentralized finance (DeFi), NFT, and Metaverse.

It's also worth remembering that 2022 is an election year in a country that has been polarized since 2016, with Bolsonaro's government low in popularity and defined by social tensions. The election could affect not only the direction of the digital real but also the future of the Brazilian economy, including the cryptocurrency market.