Brazil Enters Stablecoin Realm, BTG Pactual Launched BTG Dol

• Brazilian bank BTG Pactual launches US Dollar backed stablecoin BTG Dol.
• Latin America is slowly deviating towards crypto via stablecoins.

Brazil entered the stablecoin arena with their stablecoin BTG Dol available on Mynt and pegged to US Dollar 1:1. Launched by Brazil’s BTG Pactual on April 4 to position the country in the digital asset market. Its availability will be on the bank’s crypto-asset platform, powered by BTG Pactual’s investment system.

Brazilian Investment Bank Launches Stablecoin

BTG Pactual is one of the major Brazilian investment banks, and it keeps broadening in the crypto realm with the launch of the new stablecoin. According to the bank, the launch would facilitate holders to “dollarize” some part of their equity, which would greatly help customer interaction between digital and traditional finance.

Andre Portilho, BTG Pactual’s Head of Digital Assets, said that they are innovating the usage of financial technology for clients. When a customer buys BTG Dol, he gets easier, safer and smarter ways in dollar investments. BTG Pactual has a proprietary crypto technology platform called Mynt; the stablecoin BTG Dol is based on that. Mynt was launched in 2022, allowing users to invest in Bitcoin and Ethereum.

Marcel Monteiro, Head of Operations at Mynt, said that they recently launched 8 new assets and have nearly 22 cryptocurrencies on the platform; the inclusion of stablecoin completed the circle. The new offerings highlight the Bank’s trust in technology and its commitment to bringing innovative digital products.

More About BTG Pactual, Brazilian Banks and Crypto

Crypto exchange Gemini has partnered with BTG Pactual to facilitate custody of a few of the bank’s digital asset-related funds. Moreover, the bank’s Bitcoin 20 Multi-Market Investment Fund was officially the first BTC fund to be launched in 2021 in the Coffee pot of the world. Gemini Custody and Gemini Fund Solutions provided custody and related services for the fund.

More and more Brazilian banks are becoming crypto-friendly by adapting to the required scenario. For instance, Banco do Brasil facilitated their customers to pay taxes with cryptocurrencies like Bitcoin in February 2023. This came as a joint venture between Bitfy and the bank.

The Crypto Regulation Scenario in Brazil

Brazil is yet to apply regulations or legalization for cryptocurrency; however, the existing regulatory and legal structure provides guidelines for crypto. Virtual currencies cannot be defined as legal currency per Brazilian law, and they are considered assets under the Civil Code regime.

Initial Coin Offerings (ICOs), which closely resemble securities, are subjected to Capital Market Law and the regulatory framework of the Brazilian Securities Exchange Commission (CVM). They do not provide any specific extension of anti-money laundering law for virtual currencies, but their existing laws satisfy the requirement.

The Brazilian tax laws are yet to provide crypto-specific guidelines. Still, the tax authorities require citizens to report income from cryptocurrencies in their tax statements, while capital gains are taxed accordingly.

Latin America and Stablecoins

Stablecoins are becoming increasingly popular in Latin America, as their applications in day-to-day transactions are interesting. The majority of them are US dollar-backed, along with multiple offerings. Mexican crypto firm Bitso is working on their incorporated Euro Coin (EUROC), which is now a part of their offerings. This made them the first in Latin America to be involved in European currency-backed stablecoin.

With unpredictable volatility in Bitcoin, Ethereum and other cryptocurrencies, Latin America is slowly shifting toward stablecoins, minimizing the risks and intensifying their crypto exposure. The added use case of stablecoins is cross-border transactions; they emerge as an option for high international transfer fees.