On February 6th, Brazil's central bank Governor Gabriel Galipolo stated that the use of crypto assets in the country has significantly increased in the past two to three years, with approximately 90% of the transactions involving stablecoins. Stablecoins, tied to real-world assets like the U.S. dollar, are known for their stability compared to other cryptocurrencies such as bitcoin.
Addressing an audience at a Bank for International Settlements event in Mexico City, Galipolo pointed out that policymakers view this surge as driven by the use of cryptocurrencies for payments, which presents challenges for regulatory oversight. He highlighted that the primary use of these assets is for purchasing goods and services from overseas, noting that this trend could pose difficulties in terms of taxation and potential money laundering risks.
Galipolo clarified that Brazil's Drex initiative is not essentially a central bank digital currency but rather an infrastructure designed to enhance credit using collateralized assets, especially in a high-cost financing environment with limited guarantees. Drex will leverage distributed ledger technology for settling wholesale interbank transactions, with retail access facilitated through tokenized bank deposits.
Emphasizing the potential of payment integration to ease cross-border transactions in the Americas, Galipolo mentioned that Brazil's popular instant payment system could possibly link up with international instant payment networks due to its adaptability and programmable nature.