Brazilians’ Adoption of Crypto Grows Rapidly as Trading Activity Increases

With a population of 218 million Brazil is Latin America’s largest economy, with a GDP of US$1.92 trillion (AU$2.9 trillion) in 2022. Brazilians are increasingly using crypto in their daily activities, reflecting their growing preference for the technology.

According to the Crypto Council for Innovation, 8% of the population have used crypto and this seems to be increasing.

Related: Major Banks in France, Canada, Switzerland Report Exposure to Bitcoin ETFs

So much so that data from research firm Kaiko, shared with CNA, shows that trading volumes are now growing faster than in the United States – a country with over 100 million more inhabitants and a much higher GDP at US$25.4 trillion (AU$38.5 trillion).

The analysts at Kaiko stated that despite the current market correction, trading volume in Brazilian Real (BRL) is up 30%.

Brazilians Prefer Stablecoins for USD Exposure

Kaiko data shows that from January to early May 2024, BRL-denominated crypto trading volume hit US$6 billion (AU$9 billion), making Brazil the largest market in Latin America and ranking it 7th globally among fiat currencies. In comparison, the Mexican Peso (MXN) reached US$3.7 billion (AU$5.6 billion) and the Argentine Peso (ARS) about US$300 million (AU$454 million) in the same period, the analysts wrote.

Notably, nearly half of the BRL trades were in stablecoins, with USDT’s share increasing by nearly 20% since the 2021 bull market, predominantly at the expense of altcoins. This shift indicates a strong preference for stablecoins over Bitcoin and other altcoins among Brazilians.

Stablecoins provide a stable value tied to the USD, offering a hedge against local currency volatility and inflation. This makes them particularly appealing in regions where local currencies can be unstable or depreciate quickly.

Additionally, stablecoins often facilitate smoother and quicker international transactions compared to traditional banking systems.

Bitcoin and Ethereum Still Dominate BRL Trade

Further, Kaiko notes that BTC and ETH together constitute 43% of BRL trade volumes, compared to over 70% in USD trades, indicating a lower relative preference for these major cryptocurrencies in Brazil.

Meanwhile, Binance remains the dominant player in the BRL market with a 79% share, though its market dominance has been showing signs of decline, Kaiko added.

Get the most important crypto news delivered to your inbox by subscribing to the CNA newsletter