On May 19, an important announcement echoed through Brazil’s financial sector as the Central Bank approved for Latam Gateway to operate as a payment institution and electronic currency issuer. With Brazil featuring prominently as one of Binance’s principal global markets, this license secures a significant step forward in integrating cryptocurrencies into the nation’s fiscal landscape. Latam Gateway’s primary function, bolstering the operations of foreign enterprises within Brazil, positions Binance as its solitary crypto client, reinforcing its stand in this bustling market of over 214 million residents.
This collaborative alliance between Binance and Latam Gateway, dating back to June 2022, came into being post the cessation of Binance’s partnership with Capitual. Operating as a bridge between the Brazilian real and foreign firms, Latam Gateway’s other notable partnerships include prominent gaming-related companies such as Game Hollywood, Codashop, and Moedaz.
Waves of expansion: Cryptocurrency in Brazil
Cryptocurrency giants are making considerable strides in Brazil. Earlier this year, Binance joined Mastercard to unveil a prepaid crypto card. This pioneering move enables residents to handle transactions and settle bills with over 14 crypto assets. All cardholders must adhere to Know Your Customer (KYC) protocols to ensure compliance and transparency.
Furthermore, Coinbase, another behemoth in the crypto world, has been broadening its horizons within the nation. Since March, the exchange has collaborated with domestic payment providers to facilitate crypto purchases and transactions in the local currency. A resident of the country since 2021, Coinbase has effectively leveraged its tech hub to deliver crypto services to the Brazilian populace.
Binance under scrutiny
Brazil’s market offers vast opportunities but also has regulatory challenges. Notably, Binance is facing inquiries suspected of assisting its clients in bypassing a prohibition on cryptocurrency derivatives investments. Instituted in 2020, the Brazilian Securities and Exchange Commission’s directive halted all crypto derivatives, deeming futures contracts as securities under domestic legislation, regardless of the nature of the underlying assets.
Documents from the local investigation reveal that Binance’s platform suggested Brazilian users alter their language settings to access the Futures section. Further amplifying the scrutiny, the SEC indicated the presence of significant Portuguese-language content devoid of restriction notification for Brazilian users. This factor has precipitated comparable investigations from Canadian and American securities regulators.
As Brazil continues to evolve and embrace the world of cryptocurrencies, these developments underscore the need for clear regulation and transparency in the industry to ensure that the potential of this new financial frontier can be fully realized.
