By Bill Taylor/Contributor
Another big warning flag just got raised. There is this rather large country in South America that you may have heard of. It’s called BRAZIL. Well, it seems that Brazilians are now opening more crypto (bitcoin, etc.) trading accounts than traditional securities accounts. OK OK, I know what you’re saying. That’s not a significant market as compared to the good old USA, BUT around the globe things are going on that are changing the world and the way people invest, bank, communicate, transfer money and generally conduct business. Its leaving the U.S. way behind the proverbial eight ball. To be sure, other countries are NOT waiting for the U.S. to lead with regulations, innovation and embracing the new technology in the financial sector. They (individually) are doing it themselves.
Now Brazil had earlier banned registered investment funds from trading in cryptocurrencies but soon afterward let indirect ownership be legal. Meaning, Brazilian investors could invest in funds that invested in funds holding crptocurrencies. Most probably those rules will be relaxed as well since the overwhelming demand for crypto exposure cannot be suppressed.
South Korea tried a similar ban and reversed itself. Russia pivoted from Nyet to Dah. Even China which has banned crypto exchanges is beginning to soften its stance. So these large developed countries are seeing the future and realizing the future is going to places like Switzerland, Gibraltar, Singapore, Malta and even the Marshall Islands. Now, instead of trying to figure out how to slow this freight train down, Brazil’s Central Bank is working on their own blockchain platform and working on regulations for investing in crypto assets. AND, who are they following for guidance? Japan, not the U.S. or Europe.
Brazil now looks to be the crypto hub ‘go-to’ place for all Latin America. Again, why the warning flag? Because this is just beginning. Traditional brokerage/security firms are going to be left out as more and more investing will be done by ‘tokenizing’ assets (basically making ETFs obsolete) thus disrupting the way people invest in every asset class. Add Brazil to recognizing the crypto world IS the future.
Bill Taylor is Managing Partner at Fintek Capital & a frequent contributor to FintekNews