Brazil's Galipolo sees surge in crypto use, says 90% of flow tied to stablecoins
Director of Monetary Policy of the Central Bank of Brazil Gabriel Galipolo, who has been nominated to be the new President of the Central Bank of Brazil, attends a press conference at Central Bank of Brazil's headquarters in Brasilia, Brazil December 19, 2024. REUTERS/Adriano Machado/File Photo
Brazil's central bank chief Gabriel Galipolo said on Thursday that crypto asset usage in the country has surged over the past two to three years, with around 90 per cent of the flow linked to stablecoins.
Stablecoins are pegged to real-world assets, such as the U.S. dollar, and therefore fluctuate much less than other crypto assets like bitcoin.
Speaking at a Bank for International Settlements event in Mexico City, Galipolo said policymakers see this trend as primarily driven by the use of cryptocurrencies as a means of payment, posing challenges for oversight and regulation.
"Most of that is to buy things and to shop things from abroad," said Galipolo, emphasizing that this usage "maintains some kind of opaque vision for taxation or for money laundering."
He also argued that Brazil's Drex is not fundamentally a central bank digital currency but rather an infrastructure aimed at improving credit with collateralized assets, in a context where local financing costs are high due to the limited use of guarantees.
Drex will use distributed ledger technology to settle wholesale interbank transactions, while retail access will be based on tokenized bank deposits.
After stressing that payment integration holds significant potential to facilitate cross-border transactions across the Americas, Galipolo also said Brazilian hugely popular instant payment system Pix could enable integration with international instant payment networks due to its programmability.
