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The massive adoption of the Pix by Brazilian society in just over two years shows how much Brazil has an enabling environment for the digitalization of payment means.

Today, the Pix is already the second most used means of payment in Brazil (28%), behind the credit card (62.1%), according to a survey by StartSe, presented during the Payment Revolution event held in São Paulo on September 20 and 21.

payment means

The forum discussed new technologies and trends – and crypto assets are among them, either as a form of financial inclusion or as a freedom tool for transactions without geographical limits.

“It is difficult for crypto assets to replace cash, even more so with other tools, such as Pix, but I believe in a convergence between the two worlds. Traditional payment methods have bottlenecks that crypto assets can solve”, said the CEO of Transfero, Thiago Cesar, during a panel that discussed the future of money.

Crypto assets enable liquidity with the world, says the CEO of Transfero

Transfero, the issuer of BRZ, the leading stablecoin in an emerging country, was present at the event, reinforcing the importance of education about crypto assets and the understanding of this market by society and regulators.

payment means

From left to right: Thiago Cesar, Eduardo de Paiva Gomes, Daniel de Paiva Gomes, Fábio Lacerda e Rodrigo Stallone.

Rodrigo Stallone, director of Ventures at Transfero, moderated a panel on the future of money and the challenges of regulating the crypto asset sector, which included Transfero’s CEO Thiago Cesar, Fábio Lacerda, former Central Banker and currently a partner at KPMG, and tax lawyers Daniel de Paiva Gomes and Eduardo de Paiva Gomes.

“The currencies of the overwhelming majority of countries face diverse challenges, such as devaluation, macroeconomic or regulatory policies, creating bottlenecks that crypto assets have come to solve”, Cesar said. “Let’s consider that we have over 180 countries in the world; how many have currencies with international liquidity?”, he questioned.

In Cesar’s view, crypto assets have solved that problem. “From the moment you have a digital currency, you have liquidity with the world. So, traditional payment methods will somehow take advantage of the globality of the blockchain”, he pointed out.

The regulation of the crypto market is still under discussion in Brazil, with a bill which brings some advances, such as the establishment of best practices to curb fraud, but also some points that, in Transfero’s view, may result in legal restriction and lack of interest from companies in the sector in the Brazilian market.

“It is important to stress that the market is already regulated; all laws are already valid for crypto”, said Eduardo Gomes, mentioning that there is a false perception that the activity is not regulated.

“The laws are already applied. The question is to delimit which is the correct incidence, which compliance has to be adopted”, explained the expert, mentioning that the tax legislation already includes crypto operations through normative instruction 1888.

“Besides the tax issue, all of this is multidisciplinary. Before talking about taxation, it is necessary to understand the regulatory part”, added Daniel Gomes. According to him, new technologies should not have their development strangled.

“Since 2014, after the institution of the law on payment arrangements, the Central Bank had been keeping a distance from crypto regulation. But now the institution has realized that crypto is here to stay and effectively has a massive transforming potential”,  Lacerda pointed out.

In his view, the Central Bank has already changed its stance toward the crypto economy. “The Central Bank’s CBDC is proof of this”, he said, mentioning that the institution already understands the need for “tokenized money”.

Lacerda pointed out that the regulator, when entering the segment, has four different views:

  •  financial inclusion;
  • financial stability;
  •  financial integrity, which involves issues such as fraud prevention, money laundering, and terrorist financing;
  •  and consumer protection.

“There is a lot of focus on the last two topics, consumer protection, and money laundering. But there are no talks about the importance of financial inclusion”, the KPMG partner pointed out. In his evaluation, the regulation of crypto assets must advance so that the Brazilian CBDC can be actually created.

However, he points out that the Central Bank is not innovative. “Our Central Bank waits until the issues are reasonably consolidated, in relevant jurisdictions, to, later on, examine the subject and embrace what is good”, said Lacerda, who worked for 28 years in the institution.

“There are various guidelines in various countries on handling the issue, including the big proposal that already exists in Europe, MiCa. In fact, the token’s economic function needs to be regulated. Security tokens, for example, need to be regulated by the Securities and Exchange Commission (CVM). Payment tokens, which represent financial assets, must be regulated by the Central Bank. These institutions need to make a regulation that meets the four pillars mentioned”, he said.

The crypto market in Brazil: Transfero’s view

For Thiago Cesar, when talking about global vision, it is essential to remember that companies choose a favorable regulatory environment to be able to operate. “Transfero is based in Zug, Switzerland. There, the government wants to make the regulatory environment as favorable as possible, to attract enterprises and generate income”, said the executive.

Transfero’s CEO recalled that some countries also adopt initiatives to regulate stablecoins, which indeed fosters the presence of issuers in such localities. “There is a certain ‘competition’ to attract innovative businesses. Rio de Janeiro, with initiatives to foster the sector, the actions of Porto Maravalley, among others, is an example of this”,  he highlighted. “The city of Rio intends to be a ‘crypto hub’.

Cesar pointed out that the crypto assets scene needs to have a global vision. “That is the definition of decentralization. Anyone who doesn’t think this way is out of the market”,  he said. “Transfero will not flee Brazil but will adapt to the world”, he said, about the regulations that are being defined in the country.