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According to a recent report by the Central Bank, most of Brazil’s cross-border crypto trade is dominated by exchanges that purchase coins overseas to sell on the domestic market. The report, published by the bank’s data analysis team, highlighted that the share of international transactions carried out by Brazilian residents in the crypto trade space was only 0.3%, with domestic financial and non-financial companies representing 99.7% of cross-border crypto trading volume.
The authors of the report also noted a significant increase in Brazil’s cross-border crypto trade, with the flow of cryptoassets growing from an insignificant level in 2017 to $7 billion in 2022. This rise in transactions between Brazilian residents and non-residents has sparked interest in standardizing crypto-related terminology in the country, with Brazil’s market regulator launching a glossary of crypto-related terms to achieve this goal.
The Central Bank has been monitoring capital flows in the crypto sector since 2017 by publishing monthly crypto “import and export” data. Recent months have shown a surge in trade volumes, reaching $184 million in August 2023 and falling to $45 million in September, only to surge back up to $85 million in November of the same year. While these figures mainly rely on data provided by crypto exchanges, they do not account for international Peer-to-Peer (P2P) and Over-the-Counter (OTC) trading, both of which are popular in Brazil.
Despite fluctuations in trade volumes, the report’s authors highlighted a rise in cryptocurrency adoption in Brazil. While trading values may have been lower in 2019, the number of transactions has significantly increased. In 2019, Brazilian individuals and firms executed 18.8 million “cross-border” crypto transactions, compared to a substantial 68.7 million transactions in 2022.
This rise in adoption has also attracted the attention of major crypto exchange platforms, with Coinbase declaring Brazil as a “central area of focus” for the company’s expansion at the end of 2023. This data suggests a growing trend of interest and participation in the crypto market within Brazil, despite the high-risk nature of the asset class.
