Brazilian largest private bank, Itau Unibanco, has made its foray into the cryptocurrency space. The lender is offering cryptocurrency trading service, initially dealing in Bitcoin and Ether, according to a report by Reuters. Itau Unibanco’s expansion in digital assets is based on the evolution of crypto regulations in the Latin American country.

Its entry into the Brazilian crypto market positions it directly in competition with local players such as MB and BTG Pactual's Mynt, alongside global giant Binance. What sets Itau apart from its counterparts is its dual role as a trading platform and custodian.

By offering custodial services for crypto users' assets, Itau aims to establish its presence in Brazil's fast-growing digital space. While the initial focus remains on Bitcoin and Ether, the bank aspires to diversify its crypto portfolio.

Brazil's Evolving Crypto Landscape

Brazil's financial landscape is poised for a significant transformation following the Senate's approval of legislation proposing a 15% income tax on offshore crypto gains exceeding $1,200. This legislative move, awaiting final endorsement from the country's president, sets the stage for potential implementation on January 1.

The proposed legislation will introduce a levy of 15% on earnings derived from cryptocurrencies held in offshore exchanges. This tax would impact individuals accumulating more than $1,200 from foreign exchanges and investment funds with a single shareholder.

Brazil's rising interest in digital assets has attracted attention from global exchanges. Binance introduced Binance Pay in the country in August to offer contactless crypto payment services in partnership with local entities like Weo Games.

Global Interest Spurs Crypto Innovation in Brazil

In June, Mercado Bitcoin, Brazil's largest cryptocurrency exchange, attained a payment institution license from the country's central bank. This achievement strengthened its position and paved the way for its expansion in the fintech space.

This pivotal license enables Mercado Bitcoin to offer an array of fintech services leveraging held crypto assets, encompassing digital fixed-income investments, staking, and various financial transactions.

Alongside Mercado Bitcoin, other players holding the Brazilian payments license include Crypto.com and Bitso. Coinbase has expanded its Brazilian operations, fostering partnerships to facilitate local currency deposits and withdrawals.

Additionally, Brazil's digital banking giant, Nubank, delved into the cryptocurrency sphere in 2022. The company introduced its services, allowing customers to purchase, sell, and hold Bitcoin and Ethereum. Nubank pledged to expand its offerings beyond Bitcoin and Ethereum.