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Brazil sees $14.7 billion in crypto outflows

Brazil sees $14.7 billion in crypto outflows

GrafaGrafa2024/10/07 06:45
By:Isaac Francis

Experts are increasingly concerned about the potential impact of cryptocurrency outflows on Brazil’s exchange rate.  

According to the Central Bank of Brazil, outflows related to crypto assets and recreational services have amounted to $14.7 billion from January to August 2024.  

While this figure remains manageable for now, analysts warn that further growth in crypto outflows could affect the country's exchange rates.  

Cryptocurrencies, particularly stablecoins, have become a popular payment method in Brazil, contributing to these rising outflows.  

Some believe the adoption of crypto by Brazilians and companies experimenting with digital currencies abroad may account for the significant outflow volume.  

Mapfre Investimentos’ head of research, Luis Afonso Fernandes Lima, noted that while the situation is currently stable, it could become problematic.  

He emphasised that the current account deficit, fueled by a stronger economy and higher import levels, could worsen if the trend continues.  

“The picture is still pretty, but we definitely have a problem,” he said.  

Concerns also stem from the unpredictable nature of crypto transactions, making it difficult to forecast their impact.  

Pedro Guimaraes, product leader at Ouribank, suggested that the volume of cryptocurrency expenses is too large to be attributed solely to investors speculating or converting to stablecoins.  

He noted that companies abroad might be experimenting with these assets, further complicating the situation.  

However, some experts downplay the risk.  

Lívio Ribeiro, a partner at BRCG, stated that the rise in crypto-related outflows is only dangerous if linked to illegal activities.  

For now, the situation remains a topic of debate among economists, with the potential risks of cryptocurrency outflows still looming over Brazil’s economy.  

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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