Brazil Crypto Surge Driven by Stablecoins Capturing 90% of Flow

Brazil has seen a remarkable surge in crypto usage over the past few years, central bank chief Gabriel Galipolo noted.

He explained that about 90% of the digital asset flow in the country stems from stablecoins. These coins are pegged to tangible assets like the US dollar. As a result, they exhibit far less volatility than cryptocurrencies such as Bitcoin.

Reuters on Friday reported his comments from a Bank for International Settlements event in Mexico City. He said the trend mainly reflects the growing use of cryptocurrencies for everyday payments, which complicates regulatory oversight and tax enforcement.

Brazil's central bank chief Gabriel Galipolo said on Thursday that crypto asset usage in the country has surged over the past two to three years, with around 90% of the flow linked to stablecoins. https://t.co/4ZL3OlhLE7 pic.twitter.com/POBMwTfe6a

— Reuters Legal (@ReutersLegal) February 6, 2025

Digital Solutions Outpacing Traditional Banking in Brazil

Many Brazilians have turned to cryptocurrencies as a safeguard. They seek protection against economic instability, rampant inflation, and the depreciation of their national currency. Traditional banking comes with high fees and slow processes. These factors push consumers toward faster, more cost-effective digital alternatives.

Further, Galipolo observed that most transactions involve purchasing goods both domestically and from abroad, a practice that clouds transparency in areas like money laundering prevention and taxation.

In addition to discussing stablecoins, Galipolo touched on Brazil’s innovative Drex system. Unlike a traditional central bank digital currency, Drex serves as a digital payment infrastructure designed to enhance credit by leveraging collateralized assets.

The system employs distributed ledger technology to settle wholesale interbank transactions, while retail participants can access services through tokenized bank deposits. Moreover, Galipolo spoke about the potential of Brazil’s widely used instant payment platform Pix, noting that its programmability could facilitate integration with international instant payment networks and further boost cross-border transactions throughout the Americas.

Brazil Climbs the Global Ranks With Its Expanding Crypto Adoption

Brazil, one of Latin America’s largest economies, has struggled with currency depreciation and financial instability. As a result, many citizens have sought alternative stores of value. Bitcoin and stablecoins have become popular assets for preserving wealth and sending remittances. These digital currencies hedge against the volatility of the Brazilian real. They offer a more stable financial option during uncertain times.

Tech-savvy millennials and Gen Z investors have embraced cryptocurrencies as a path to financial independence. For many, crypto is more than just an investment. It is a gateway to wealth building in a rapidly changing global economy. This growing interest has placed Brazil 10th on the Chainalysis Global Crypto Adoption Index. This ranking reflects the country’s expanding digital asset market.

Recognizing this momentum, Brazil’s Central Bank and IRS have introduced a regulatory framework that actively seeks public input from industry players. Meanwhile, the Brazilian Congress is reviewing federal bills on asset segregation and stablecoins, setting the stage for more structured crypto-related policies.

In a bold move last November, Congressman Eros Biondini proposed a bill advocating for the creation of a national Bitcoin reserve. The initiative aims to allocate up to 5% of Brazil’s $372b in international reserves to Bitcoin.