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Will Brazil be the next El Salvador?

It's official: Brazil recognizes Bitcoin as legal tender.

By Mike Hesp
• 4 min read
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Will Brazil be the next El Salvador?

It’s official: Brazil recognizes Bitcoin as legal tender. President Jair Bolsonaro, who is still in office, signed today a law that sets a regulatory framework for the trading and use of the number 1 cryptocurrency.

It marks the culmination of a long journey for the South American nation to become a crypto state, similar to El Salvador. Bitcoin has been legal tender there since November 2021. Will Brazil be the next El Salvador?

Despite the bear market, adoption in Brazil progressed smoothly in 2022. Never before were more companies in the country dealing with cryptocurrencies than now. In total, there are over 12,000. More than ten million people — about five percent of the population — regularly use crypto. That puts the country in the top 10 for crypto adoption. These numbers are expected to surge now.

Brazilian stock markets and banks in crypto fever

Brazilian exchange giant XP Inc. has launched a crypto platform. Alongside Itaú Unibanco, one of the country’s biggest banks, crypto custody is offered. Tether recently installed 24,000 ATMs in Brazil enabling USDT usage. And Visa launched a crypto debit card — with bitcoin cashback. This shows that big Brazilian companies are more willing than those in other countries to experiment with crypto and Bitcoin.

That said, there is a downside: the most likely regulator of the new crypto market is the Brazilian central bank. Chair Roberto Campos Neto isn’t fond of cryptocurrencies as a payment method, mainly due to volatility. The central bank is also working on its own digital currency, the Real Digital. It’s slated for 2024.

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