RIO DE JANEIRO, BRAZIL – The month of May marked the peak of cryptocurrency purchases by Brazilians, with a volume of R$4.1 billion (US$739 million), according to the country’s Central Bank. The figure has been dropping since then, with R$3.8 billion in June, and R$3.2 billion in July, albeit still higher than in February and March.
Making an estimate, total digital assets held by Brazilians may amount up to R$276 billion, compared to the R$88 billion held in U.S. stocks, said the Central Bank’s monetary policy director Bruno Serra last Friday.
In August, Central Bank President Roberto Campos Neto said Brazilians held approximately R$220 billion in cryptocurrencies. “It’s a very big business, and it drawing the attention of regulators worldwide, not only in Brazil,” Roberto Campos Neto said.
According to Serra, the Central Bank has a “highly controlled foreign exchange market,” which is aware of all transactions related to cryptocurrencies. “We have foreign exchange contracts for all transactions, and we are able to map 100% of them,” he said.
The transfer of cryptocurrencies between residents and non-residents of Brazil began to be disclosed since August by the Central Bank in the assets account of the balance of payments. Cryptocurrencies are considered assets, i.e., non-financial and produced assets, following the recommendations of the International Monetary Fund (IMF).
According to Serra, investing in cryptoassets is a way to seek diversification. “I think this offshore diversification dynamic may be here to stay. Many diversification channels have been opened up. Foreign exchange regulation is becoming more lenient in that sense; it’s something we need to consider,” he said.
“It’s a one-way flow. For the cost of energy, Brazil does not produce cryptoassets, it is only an importer.”