How Brazil’s Crypto Regulatory Environment is Shaping the Future of Web 3.0

The Growing Interest in Web 3.0

Despite its current lack of popularity, the cryptocurrency market is still drawing new users to Web 3.0 each day, especially in emerging markets such as Brazil, according to Coinext CEO José Ribeiro. At the Web Summit in Lisbon, Ribeiro shared his views on Bitcoin (BTC), the Brazilian crypto economy, and the impact of regulatory clarity on the country’s payments sector.

Ribeiro believes that the Bitcoin volume transactions in Brazil will reach a record level by 2023, as more global crypto exchanges, including Binance, OKX, and Coinbase, have set up operations in the country. He commented that “the competitiveness has increased considerably, which is part of the business from a crypto adoption perspective. The country has a history with inflation, and I see that interest rates are going to be down next year for sure, and we’re going to have another cycle.”

Impact of Lower Interest Rates in Brazil

The benchmark interest rate in Brazil has recently dropped from 12.75% to 12.25%, and is predicted to reach 9.25% by December 2024, according to a survey by the local central bank.

The approval of a Bitcoin exchange-traded fund in the United States and the Bitcoin halving are expected to have an effect on crypto prices. Nevertheless, Ribeiro believes that the crypto community should pay attention to fundamentals rather than price movements.

In addition, Ribeiro pointed out the significance of regulatory frameworks in fostering innovation in Brazil. He mentioned that the country is “very advanced in terms of forms to comply with the tax authorities”, referring to the monthly reports filed with the local tax authorities on transactions conducted on the exchanges.

The CEO of Coinext expressed that Brazilian regulators are open to dialogue about crypto and payments.

In recent years, the Brazilian central bank has rolled out Pix, a system that enables instantaneous payments between individuals and companies. All that is needed for a Pix transaction is the recipient’s key identifier, such as an ID number, a cell phone number or an email address.

The nation is also developing its central bank digital currency, called DREX, which is projected to be available in 2021. According to Ribeiro, this will take Brazil to the next level in terms of blockchain adoption and using blockchain as the foundation of the entire financial market sector.