Cryptocurrency imports in Brazil are on the rise, affecting the country’s trade balance.
The Central Bank of Brazil reports that these imports reached $7 billion this year until August. Interestingly, this number is close to last year’s total of $7.4 billion.
In August alone, Brazil imported $1.14 billion worth of cryptocurrencies. This figure represents a historic high.
It also made up 5% of the country’s total imports for the month. Last year, this number was just 2%.
The Central Bank follows guidelines the International Monetary Fund (IMF) set. According to these rules, cryptocurrencies are non-financial assets.
Even though they are digital, their purchase and sale involve currency exchange contracts. Therefore, they are part of the trade balance.
Digital currencies mainly include things like tokens and NFTs. These digital records signify ownership of a share in a product or a company.
Generally, people trade these assets on online platforms.
Looking at a 12-month period, Brazil’s net cryptocurrency imports total $9.4 billion. This amount marks a 38% increase from $6.8 billion recorded up to August last year.
Globally, trading volumes for cryptocurrencies are decreasing. The range is around 60% to 70%, depending on the source.
Despite this global downturn, Brazil’s cryptocurrency imports are increasing.
Researchers Andreza Palma and Estêvão Bastos have studied this phenomenon. They work at the Institute for Applied Economic Research, known as Ipea.
They highlight that the rise in cryptocurrency imports creates a gap.
Central Bank Figures
This gap is between the trade balances reported by two Brazilian entities: the Central Bank and the Ministry of Development.
For example, in August, the Central Bank recorded a trade surplus of $7.6 billion. Meanwhile, the Ministry of Development reported a higher surplus of $9.6 billion.
Year-to-date until August, the Central Bank has reported a trade surplus of $51.5 billion.
The Ministry of Development reports a higher number: $62.3 billion. The difference is $10.8 billion.
According to these researchers, cryptocurrency imports are a significant trend. From January to August this year, they totaled $7.4 billion.
In comparison, Brazilians made $9 billion in direct foreign investments during the same period.
Since November 2018, the Central Bank has included cryptocurrency trade data in its reports.
From then to now, Brazilians have imported $27.7 billion worth of cryptocurrencies.
However, exports of these digital assets have been much lower, totaling just $363 million up to August this year.