Author: Zen, PANews “We are late,” said Larry Fink, founder of BlackRock, at a recent Wall Street Journal summit. He believes that the development of tokenization in the United States needs to keep pace with the world to avoid falling behind, and that Brazil is the leader in his eyes. This answer is quite unexpected. As one of the world's top ten economies with a unique geographical location, Brazil is also trying to extend its dream of becoming a powerful nation into the crypto world. In December, the capital markets of São Paulo, the capital of Brazil, were not lacking in new stories about "digital assets". On December 4th, Nasdaq-listed DeFi Technologies announced that its subsidiary, Valour, has been approved to list four digital asset ETPs on the Brazilian main exchange B3. The underlying assets include Bitcoin, Ethereum, XRP, and Sui. The products will be denominated in Brazilian Real and traded through local brokerages and custody systems. DeFi Technologies CEO Johan Wattenström stated that Brazil "has become one of the most important and fastest-growing digital asset markets globally." On December 8, Paradigm, a well-known crypto venture capital firm, announced a $13.5 million investment in Brazilian stablecoin company Crown, marking the San Francisco-based fund's first bet on a Brazilian startup. Crown's BRLV is a stablecoin pegged 1:1 to the Brazilian real and backed by Brazilian government bonds. After this round of financing, it was valued at approximately US$90 million. The cumulative subscription scale of BRLV has exceeded 360 million reais, and it has been described by some media as one of the largest non-dollar stablecoins in emerging markets. These are not isolated incidents. In the narratives of international capital and infrastructure providers, Brazil is no longer just a "high-interest-rate emerging market," but is being regarded as the main battlefield for Latin American digital asset experiments, an underestimated "top student." Latin American cryptocurrency leaders Brazil is now the largest cryptocurrency market in Latin America and one of the fastest-growing markets globally. According to Chainalysis ' 2025 Cryptocurrency Geography Report , in 2024, the value of cryptocurrencies flowing into Brazil was approximately $318.8 billion, representing a year-on-year growth rate of 109.9%, accounting for nearly one-third of the entire Latin American region and ranking fifth in the 2025 Global Cryptocurrency Adoption Index. At the Brazil Blockchain Conference held at the end of November, Flavio Correa Prado, an auditor at the Brazilian Federal Tax Service, revealed that the reported monthly cryptocurrency transaction volume, according to existing rules, has reached $6 billion to $8 billion. He stated that if the current trend continues, this figure could rise to $9 billion per month by 2030. The majority of this transaction volume comes from stablecoins such as USDT and USDC. In terms of asset structure, the Brazilian market is unique in that stablecoins play a dominant role. An analysis by cryptocurrency custody company Fireblocks in April of this year indicated that stablecoins accounted for 59.8% of related crypto activities in Brazil, far exceeding the global average of 44.7%. Official statistics are even more dramatic; Brazilian Central Bank Governor Gabriel Galípolo stated in a public speech this year that approximately 90% of the country's cryptocurrency usage, including cross-border payments and exchange settlements, can be traced back to stablecoin-related operations. The highly stablecoin-dominated structure indicates that Brazil is a crypto market with a high degree of "financialization and compliance," rather than simply a speculative playground. However, in terms of crypto asset allocation, Brazil was actually one of the earliest markets globally to systematically embrace crypto assets, being among the first to incorporate crypto products into its existing capital markets. The Brazilian Stock Exchange B3 (Brasil, Bolsa, Balcão) is the country's only stock exchange and the core market for stocks, bonds, futures, and ETFs. As early as 2021–2022, managers such as Hashdex and QR Asset launched multiple Bitcoin, Ethereum, and comprehensive crypto index ETFs on B3. Furthermore, in September of last year, Brazilian regulators approved the world's first single-asset Solana spot ETF and its listing on B3, which was seen by many media outlets as a bold attempt to approve Solana spot ETFs before the United States. As of mid-2025, B3 offered over 20 ETFs providing full or partial crypto exposure, covering Bitcoin, Ethereum, DeFi, and hybrid products combining Bitcoin and gold. B3's official educational website describes crypto ETFs as "practical tools for gaining exposure to digital assets in a regulated environment," emphasizing that custody is handled by regulated institutions, pricing is in the country's legal tender (the Brazilian real), and inclusion in the national tax system. Furthermore, B3 has launched Bitcoin futures contracts and plans to expand to futures for cryptocurrencies such as Ethereum and Solana, providing hedging and arbitrage tools for institutional and high-net-worth investors. At the retail level, Brazil has also developed a fairly complete lineup of participants. Local cryptocurrency exchanges, led by Mercado Bitcoin, combine trading, custody, and tokenized asset issuance; leading digital bank Nubank has directly embedded its crypto investment module into its mobile banking app, boasting approximately 6.6 million crypto users in Brazil, making it one of the world's largest crypto-user banks; another giant, PicPay, has over 60 million users and has established an independent Crypto & Web3 business unit, offering trading, stablecoins, and global account products. It's worth noting that data disclosed by Circle and Nubank shows that in 2024, the balance of USDC held by Nubank customers increased tenfold, with approximately 30% of crypto customers' portfolios containing USDC, and over half of new users choosing USDC as their first crypto asset. In 2025, Nubank further offered a 4% annualized return reward program for USDC holders, formally embedding the USD stablecoin into its banking wealth management logic. A "parallel dollar system" under inflation and devaluation Compared to Argentina, Brazil is not a high-inflation country that is "collapsing in all directions," but its macroeconomic environment is not friendly to residents' confidence. Monitoring by the World Bank and the IMF shows that since 2021, Brazilian inflation has repeatedly exceeded the central bank's target ceiling, and is expected to rise again between the end of 2024 and mid-2025. In August 2025, the CPI is projected to rise by approximately 5.1% year-on-year, higher than the target ceiling of 4.5%. Over the past decade, the Brazilian real has experienced several significant depreciations against the US dollar: from around 2 BRL/USD in 2013 to above 5 BRL/USD in 2020–2021. Even with some recovery in the last two years, it remains far weaker than at the levels of the early 2010s. For middle-class families and businesses, this gradual, insidious currency devaluation has led to a "dollarization" of savings habits, with many families using dollar deposits, offshore accounts, or stablecoins for "soft outflow" of some assets. On the business side, hedging demand has increased, with importers, exporters, and companies reliant on commodities seeking more stable units of value outside their local currency balance sheets. Furthermore, Brazil's long-standing double-digit benchmark interest rate, while nominally high, has unstable real purchasing power, creating fertile ground for financial innovations such as "interest rate differentials." Chainalysis's in-depth analysis of Latin America points out that stablecoins serve three main functions in the region: hedging local currency risk, cross-border remittances/trade, and e-commerce payments. Therefore, the underlying driver of Brazil's demand for stablecoins is the use of USDT/USDC as an alternative to offshore dollar accounts, largely a rational decision based on local currency volatility and capital controls. The improved digital payment infrastructure has also made it easier for residents to access stablecoins. Pix, the instant payment system led by the Central Bank of Brazil, is the main channel for daily money transfers and consumption. In 2024, Circle integrated with Pix, allowing Brazilian users to freely convert between local currency and USDC within minutes using local bank transfers. Payment infrastructure companies like TransFi combine stablecoins with Pix for cross-border remittances, e-commerce payments, and settlements for freelancers, enabling automatic currency exchange. The Evolution and "Points-Based" Flow of Brazil's Regulatory Framework The rapid development of Brazil's cryptocurrency market is not only driven by the intrinsic factor of currency devaluation, but also inseparable from the acceptance and regulation by its regulatory bodies. Looking back at Brazil's regulatory trajectory over the past decade, it has not simply gone from nothing to something, but rather evolved from risk warnings and general legal constraints to systemic legislation and foreign exchange control. In 2014, as cryptocurrencies began to emerge as a significant new force, the Central Bank of Brazil issued a statement warning of the risks associated with so-called "virtual currencies," clarifying that they did not fall under the legal definition of electronic money in Brazil. The statement also indicated that while the impact of cryptocurrencies on the national financial system was still limited at the time, the central bank was continuously monitoring them. In 2017, during the ICO boom, the central bank issued another announcement emphasizing that virtual currencies were not regulated by Brazil's national financial system, lacked any sovereign guarantees, experienced extreme price volatility, and posed a risk of being used for money laundering and illegal activities. That same year, the Securities and Exchange Commission (CVM) issued a statement regarding ICOs, reminding the market that some tokens might constitute securities and be subject to CVM regulation, and clarifying that investment funds were not allowed to directly hold cryptocurrencies at that time because they did not yet meet the existing legal definition of "financial assets." During this phase, regulators do not prohibit individuals and businesses from holding or using high-risk assets, but they do not recognize their status as financial assets, nor do they allow funds within the regulatory system to allocate them directly. In 2019, Brazil began to bring cryptocurrencies under the purview of tax and foreign exchange regulations. Its Federal Tax Service (Receita Federal do Brasil) issued a regulatory directive requiring domestic virtual asset service providers, including exchanges, to report user transaction information to the tax authorities; residents who conduct cryptocurrency transactions exceeding a certain scale on foreign platforms or over-the-counter markets are also required to report, and related profits are subject to income tax. In late 2022, Brazil departed from the constraints of general legal frameworks and passed Federal Law No. 14,478, known in the industry as the "Crypto Law." This law established the legal category of "Virtual Asset Service Providers (VASPs)" and authorized executive departments (the central bank, CVM, etc.) to formulate specific rules. Subsequently, in 2023, the government passed a decree explicitly including "regulated virtual asset services" within the scope of financial system regulation, paving the way for subsequent detailed rules led by the central bank. Chainalysis's 2025 analysis pointed out that this laid the foundation for Brazil to become the first in Latin America to establish a "comprehensive crypto regulatory framework." This year, Brazil further refined its legislation on cryptocurrencies, with the central bank issuing several resolutions, numbered 519–521. Under the new foreign exchange law, stablecoins denominated in either foreign or local currencies will be considered a digital representation of foreign exchange or a claim on foreign currency; institutions providing related exchange, cross-border payment, and settlement services are required to obtain the corresponding foreign exchange and payment licenses; and the government is also discussing taxation schemes for cross-border encrypted payments to prevent regulatory arbitrage using stablecoins. This framework does not treat stablecoins as "illegal dollarization tools" and ban them outright, but rather strives to incorporate them into a monitorable and taxable foreign exchange system. In summary, Brazil's cryptocurrency story is not a dramatic narrative of "sudden deregulation and overnight explosion," but rather a result of residents and businesses spontaneously seeking hedging tools against the backdrop of long-term inflation and currency volatility. With the maturity of fintech infrastructure such as Pix, crypto assets naturally embedded themselves into the existing payment and investment systems. After years of observation and partial constraints, regulators chose to bring this market into a visible and controllable institutional framework through taxation, virtual asset laws, and new foreign exchange regulations. The Paradigm bet on Crown mentioned at the beginning of this article is just the latest footnote in this process. In the coming years, with the advancement of the Drex digital real and the launch of more stablecoin and asset tokenization projects, Brazil is likely to continue to serve as a model of "deep coupling between crypto and traditional finance," providing a continuous reference point for global crypto regulation and market practice. Author: Zen, PANews “We are late,” said Larry Fink, founder of BlackRock, at a recent Wall Street Journal summit. He believes that the development of tokenization in the United States needs to keep pace with the world to avoid falling behind, and that Brazil is the leader in his eyes. This answer is quite unexpected. As one of the world's top ten economies with a unique geographical location, Brazil is also trying to extend its dream of becoming a powerful nation into the crypto world. In December, the capital markets of São Paulo, the capital of Brazil, were not lacking in new stories about "digital assets". On December 4th, Nasdaq-listed DeFi Technologies announced that its subsidiary, Valour, has been approved to list four digital asset ETPs on the Brazilian main exchange B3. The underlying assets include Bitcoin, Ethereum, XRP, and Sui. The products will be denominated in Brazilian Real and traded through local brokerages and custody systems. DeFi Technologies CEO Johan Wattenström stated that Brazil "has become one of the most important and fastest-growing digital asset markets globally." On December 8, Paradigm, a well-known crypto venture capital firm, announced a $13.5 million investment in Brazilian stablecoin company Crown, marking the San Francisco-based fund's first bet on a Brazilian startup. Crown's BRLV is a stablecoin pegged 1:1 to the Brazilian real and backed by Brazilian government bonds. After this round of financing, it was valued at approximately US$90 million. The cumulative subscription scale of BRLV has exceeded 360 million reais, and it has been described by some media as one of the largest non-dollar stablecoins in emerging markets. These are not isolated incidents. In the narratives of international capital and infrastructure providers, Brazil is no longer just a "high-interest-rate emerging market," but is being regarded as the main battlefield for Latin American digital asset experiments, an underestimated "top student." Latin American cryptocurrency leaders Brazil is now the largest cryptocurrency market in Latin America and one of the fastest-growing markets globally. According to Chainalysis ' 2025 Cryptocurrency Geography Report , in 2024, the value of cryptocurrencies flowing into Brazil was approximately $318.8 billion, representing a year-on-year growth rate of 109.9%, accounting for nearly one-third of the entire Latin American region and ranking fifth in the 2025 Global Cryptocurrency Adoption Index. At the Brazil Blockchain Conference held at the end of November, Flavio Correa Prado, an auditor at the Brazilian Federal Tax Service, revealed that the reported monthly cryptocurrency transaction volume, according to existing rules, has reached $6 billion to $8 billion. He stated that if the current trend continues, this figure could rise to $9 billion per month by 2030. The majority of this transaction volume comes from stablecoins such as USDT and USDC. In terms of asset structure, the Brazilian market is unique in that stablecoins play a dominant role. An analysis by cryptocurrency custody company Fireblocks in April of this year indicated that stablecoins accounted for 59.8% of related crypto activities in Brazil, far exceeding the global average of 44.7%. Official statistics are even more dramatic; Brazilian Central Bank Governor Gabriel Galípolo stated in a public speech this year that approximately 90% of the country's cryptocurrency usage, including cross-border payments and exchange settlements, can be traced back to stablecoin-related operations. The highly stablecoin-dominated structure indicates that Brazil is a crypto market with a high degree of "financialization and compliance," rather than simply a speculative playground. However, in terms of crypto asset allocation, Brazil was actually one of the earliest markets globally to systematically embrace crypto assets, being among the first to incorporate crypto products into its existing capital markets. The Brazilian Stock Exchange B3 (Brasil, Bolsa, Balcão) is the country's only stock exchange and the core market for stocks, bonds, futures, and ETFs. As early as 2021–2022, managers such as Hashdex and QR Asset launched multiple Bitcoin, Ethereum, and comprehensive crypto index ETFs on B3. Furthermore, in September of last year, Brazilian regulators approved the world's first single-asset Solana spot ETF and its listing on B3, which was seen by many media outlets as a bold attempt to approve Solana spot ETFs before the United States. As of mid-2025, B3 offered over 20 ETFs providing full or partial crypto exposure, covering Bitcoin, Ethereum, DeFi, and hybrid products combining Bitcoin and gold. B3's official educational website describes crypto ETFs as "practical tools for gaining exposure to digital assets in a regulated environment," emphasizing that custody is handled by regulated institutions, pricing is in the country's legal tender (the Brazilian real), and inclusion in the national tax system. Furthermore, B3 has launched Bitcoin futures contracts and plans to expand to futures for cryptocurrencies such as Ethereum and Solana, providing hedging and arbitrage tools for institutional and high-net-worth investors. At the retail level, Brazil has also developed a fairly complete lineup of participants. Local cryptocurrency exchanges, led by Mercado Bitcoin, combine trading, custody, and tokenized asset issuance; leading digital bank Nubank has directly embedded its crypto investment module into its mobile banking app, boasting approximately 6.6 million crypto users in Brazil, making it one of the world's largest crypto-user banks; another giant, PicPay, has over 60 million users and has established an independent Crypto & Web3 business unit, offering trading, stablecoins, and global account products. It's worth noting that data disclosed by Circle and Nubank shows that in 2024, the balance of USDC held by Nubank customers increased tenfold, with approximately 30% of crypto customers' portfolios containing USDC, and over half of new users choosing USDC as their first crypto asset. In 2025, Nubank further offered a 4% annualized return reward program for USDC holders, formally embedding the USD stablecoin into its banking wealth management logic. A "parallel dollar system" under inflation and devaluation Compared to Argentina, Brazil is not a high-inflation country that is "collapsing in all directions," but its macroeconomic environment is not friendly to residents' confidence. Monitoring by the World Bank and the IMF shows that since 2021, Brazilian inflation has repeatedly exceeded the central bank's target ceiling, and is expected to rise again between the end of 2024 and mid-2025. In August 2025, the CPI is projected to rise by approximately 5.1% year-on-year, higher than the target ceiling of 4.5%. Over the past decade, the Brazilian real has experienced several significant depreciations against the US dollar: from around 2 BRL/USD in 2013 to above 5 BRL/USD in 2020–2021. Even with some recovery in the last two years, it remains far weaker than at the levels of the early 2010s. For middle-class families and businesses, this gradual, insidious currency devaluation has led to a "dollarization" of savings habits, with many families using dollar deposits, offshore accounts, or stablecoins for "soft outflow" of some assets. On the business side, hedging demand has increased, with importers, exporters, and companies reliant on commodities seeking more stable units of value outside their local currency balance sheets. Furthermore, Brazil's long-standing double-digit benchmark interest rate, while nominally high, has unstable real purchasing power, creating fertile ground for financial innovations such as "interest rate differentials." Chainalysis's in-depth analysis of Latin America points out that stablecoins serve three main functions in the region: hedging local currency risk, cross-border remittances/trade, and e-commerce payments. Therefore, the underlying driver of Brazil's demand for stablecoins is the use of USDT/USDC as an alternative to offshore dollar accounts, largely a rational decision based on local currency volatility and capital controls. The improved digital payment infrastructure has also made it easier for residents to access stablecoins. Pix, the instant payment system led by the Central Bank of Brazil, is the main channel for daily money transfers and consumption. In 2024, Circle integrated with Pix, allowing Brazilian users to freely convert between local currency and USDC within minutes using local bank transfers. Payment infrastructure companies like TransFi combine stablecoins with Pix for cross-border remittances, e-commerce payments, and settlements for freelancers, enabling automatic currency exchange. The Evolution and "Points-Based" Flow of Brazil's Regulatory Framework The rapid development of Brazil's cryptocurrency market is not only driven by the intrinsic factor of currency devaluation, but also inseparable from the acceptance and regulation by its regulatory bodies. Looking back at Brazil's regulatory trajectory over the past decade, it has not simply gone from nothing to something, but rather evolved from risk warnings and general legal constraints to systemic legislation and foreign exchange control. In 2014, as cryptocurrencies began to emerge as a significant new force, the Central Bank of Brazil issued a statement warning of the risks associated with so-called "virtual currencies," clarifying that they did not fall under the legal definition of electronic money in Brazil. The statement also indicated that while the impact of cryptocurrencies on the national financial system was still limited at the time, the central bank was continuously monitoring them. In 2017, during the ICO boom, the central bank issued another announcement emphasizing that virtual currencies were not regulated by Brazil's national financial system, lacked any sovereign guarantees, experienced extreme price volatility, and posed a risk of being used for money laundering and illegal activities. That same year, the Securities and Exchange Commission (CVM) issued a statement regarding ICOs, reminding the market that some tokens might constitute securities and be subject to CVM regulation, and clarifying that investment funds were not allowed to directly hold cryptocurrencies at that time because they did not yet meet the existing legal definition of "financial assets." During this phase, regulators do not prohibit individuals and businesses from holding or using high-risk assets, but they do not recognize their status as financial assets, nor do they allow funds within the regulatory system to allocate them directly. In 2019, Brazil began to bring cryptocurrencies under the purview of tax and foreign exchange regulations. Its Federal Tax Service (Receita Federal do Brasil) issued a regulatory directive requiring domestic virtual asset service providers, including exchanges, to report user transaction information to the tax authorities; residents who conduct cryptocurrency transactions exceeding a certain scale on foreign platforms or over-the-counter markets are also required to report, and related profits are subject to income tax. In late 2022, Brazil departed from the constraints of general legal frameworks and passed Federal Law No. 14,478, known in the industry as the "Crypto Law." This law established the legal category of "Virtual Asset Service Providers (VASPs)" and authorized executive departments (the central bank, CVM, etc.) to formulate specific rules. Subsequently, in 2023, the government passed a decree explicitly including "regulated virtual asset services" within the scope of financial system regulation, paving the way for subsequent detailed rules led by the central bank. Chainalysis's 2025 analysis pointed out that this laid the foundation for Brazil to become the first in Latin America to establish a "comprehensive crypto regulatory framework." This year, Brazil further refined its legislation on cryptocurrencies, with the central bank issuing several resolutions, numbered 519–521. Under the new foreign exchange law, stablecoins denominated in either foreign or local currencies will be considered a digital representation of foreign exchange or a claim on foreign currency; institutions providing related exchange, cross-border payment, and settlement services are required to obtain the corresponding foreign exchange and payment licenses; and the government is also discussing taxation schemes for cross-border encrypted payments to prevent regulatory arbitrage using stablecoins. This framework does not treat stablecoins as "illegal dollarization tools" and ban them outright, but rather strives to incorporate them into a monitorable and taxable foreign exchange system. In summary, Brazil's cryptocurrency story is not a dramatic narrative of "sudden deregulation and overnight explosion," but rather a result of residents and businesses spontaneously seeking hedging tools against the backdrop of long-term inflation and currency volatility. With the maturity of fintech infrastructure such as Pix, crypto assets naturally embedded themselves into the existing payment and investment systems. After years of observation and partial constraints, regulators chose to bring this market into a visible and controllable institutional framework through taxation, virtual asset laws, and new foreign exchange regulations. The Paradigm bet on Crown mentioned at the beginning of this article is just the latest footnote in this process. In the coming years, with the advancement of the Drex digital real and the launch of more stablecoin and asset tokenization projects, Brazil is likely to continue to serve as a model of "deep coupling between crypto and traditional finance," providing a continuous reference point for global crypto regulation and market practice.