Brazil's central bank chief Gabriel Galipolo has highlighted a significant rise in cryptocurrency adoption across the country, with the volume of crypto transactions surging dramatically over the past two to three years.
Galipolo noted that around 90% of this activity is tied to stablecoins, which are increasingly being used for everyday purchases and cross-border shopping. This surge in stablecoin usage has raised concerns about regulatory challenges, particularly regarding taxation and money laundering.
To address these challenges, Galipolo pointed to Brazil's Drex initiative, a framework for facilitating credit backed by collateralized assets. Drex aims to lower the cost of borrowing and expand the use of secured financing.
Galipolo also emphasized the potential of Pix, Brazil's popular instant payment system, to extend its influence beyond domestic borders. Pix's programmability and flexibility could allow for integration with international instant payment networks, creating a more seamless cross-border payment experience.
However, the Brazil Central Bank proposed plans to ban withdrawals of stablecoins to self custody wallets last year. This proposal is still open for public consultation until February 28, 2025.