The global crypto winter might have cooled enthusiasm elsewhere, but in Brazil, the crypto flame is burning fiercely. Over 4 million Brazilians are now engaging with digital assets, prompting established financial institutions to dive into this burgeoning sector.
Both fintech firms and traditional banks are tapping into the crypto market, driven by significant user interest and the potential for revenue through transaction fees. Notably, Itau, Brazil’s largest private bank, has made headlines as the first major traditional bank in Latin America to offer crypto trading services. This move marks a significant shift, following the earlier forays of digital banks like Nubank and Mercado Pago into cryptocurrency brokerage.
“Itau’s entry into crypto trading reflects the growing convergence between traditional finance and the crypto economy,” notes Bruno Diniz, a fintech consultant and author. “The expansion into digital assets by such a major player signifies the accelerating integration of crypto into mainstream financial services.”
Itau, with its $70 billion market capitalization and a vast customer base, is leveraging its online investment platform, Ion, to offer trading in Bitcoin and Ether. This strategic shift is part of its broader efforts to remain competitive against agile neobanks that have quickly amassed large user bases.
In 2022, Nubank and Mercado Pago ventured into the crypto space, achieving remarkable success. Nubank, for instance, gained one million crypto customers within a month of launching its services. Both fintechs have since broadened their offerings by incorporating USDC, a stablecoin pegged to the US dollar, to meet the demand for stable digital assets in Latin America’s volatile economic environment.
Despite some setbacks, such as regulatory challenges in Argentina that have limited crypto service options, Brazil is forging ahead. The country’s regulatory framework for crypto assets, finalized in late 2022 and overseen by the Central Bank, is fostering a more structured environment for digital asset operations.
By July 2024, Brazil saw over 4 million individual crypto investors, with nearly 20 billion Brazilian reais transacted. Bitcoin led in transaction volume, followed by Ether and USDT. While some digital lenders have exited the crypto space, the overall momentum suggests a thriving market for crypto services.
As Brazilian banks and fintechs continue to navigate this evolving landscape, their expanding offerings underscore the growing importance of digital assets in the region’s financial ecosystem.
