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Bank concentration fell slightly last year, according to the Central Bank (BC). Last year, the country’s five largest banks – Banco do Brasil, Itaú, Unibanco, Bradesco, Caixa Econômica Federal and Santander – held 81% of the total assets of the commercial banking segment. At the end of 2018, this percentage was 81.2%.

The drop still shows a very concentrated market. The five largest banks accounted for 83.4% of deposits at the end of last year, compared to 83.8% in 2018. In the case of credit, this group accounted for 83.7% of total operations in 2019, compared to 84.8% in the previous year.

According to BC, there was a reduction in the participation of federal public banks – Banco do Brasil, Caixa Econômica Federal and Banco Nacional de Desenvolvimento Econômico e Social (BNDES).

 “The reduction in the participation of major federal public banks was, to some extent, accompanied by an increase in concentration among private institutions, but not enough to increase total concentration”, the BC said.

Banking concentration makes room for cryptocurrencies

The lack of competitiveness in the banking sector bothers Brazilian economists. In addition, Brazil today has about 40 million unbanked people, partly due to this excessive concentration, which constitutes a strong barrier of entry for new account holders. Even The Minister of Economy, Paulo Guedes, recently showed discomfort with this data, in live promoted by Itaú. “200 million fools exploited by six banks”, he said.

Cryptocurrencies have the potential to fill this void and crypto companies are committed to accomplish it. At the same time that there are 40 million unbanked in Brazil, there are about 220 million smartphones: a number greater than the population itself. And that can help solve that equation.