The Dominance of Domestic Exchanges in Brazil’s Cross-Border Crypto Trade

The Dominance of Domestic Exchanges in Brazil’s Cross-Border Crypto Trade

In a recent report released by the Central Bank, it was revealed that exchanges buying coins overseas to sell on the domestic market play a major role in Brazil’s cross-border crypto trade. The report highlights the domination of trading platforms in the nation’s coin-buying activities. Interestingly, the share of international transactions carried out by Brazilian residents in the crypto trade space was a mere 0.3%. On the contrary, domestic financial and non-financial companies accounted for a staggering 99.7% of the cross-border crypto trading volume.

Over the past years, the cross-border flow of cryptoassets has experienced significant growth in Brazil. The report indicates that transactions between Brazilian residents and non-residents, primarily imports, have surged from an insignificant level in 2017 to a whopping $7 billion in 2022. This expansion in the crypto market demonstrates the increasing acceptance and adoption of cryptocurrencies in the country.

Since 2017, the Central Bank has been publishing monthly data on crypto “import and export” to monitor capital flows in the sector. Recent statistics have shown remarkable fluctuations in trading volumes. In August 2023, volumes reached a staggering $184 million, which subsequently dropped to $45 million in September and slightly rose to $55 million in October. However, volumes experienced a remarkable increase of 85% in November. Unfortunately, the report does not include the data for December 2023.
It is important to note that the bank’s calculations heavily rely on data provided by crypto exchanges, which excludes popular trading methods like Peer-to-Peer (P2P) and Over-the-Counter (OTC) trading in Brazil.

The report points out that the bull market in 2019 marked a significant peak in trading volumes, reaching a staggering $161 million. However, these figures declined to $109 million in 2022. This change in trade volumes highlights the volatile nature of the crypto market and its susceptibility to market trends.
Despite the decline in value, the data also reflects a surge in adoption. While the value of trades decreased post-2019, Brazilian individuals and firms have become much more active on exchange platforms. In 2019, a total of 18.8 million cross-border crypto transactions were executed. In sharp contrast, this number rose to an impressive 68.7 million transactions in 2022. This surge in transaction volume showcases the growing interest and engagement of Brazilians in the crypto market.

Recognizing the potential and significance of Brazil’s crypto market, leading exchange giant Coinbase has recently identified the country as a central area of focus for expansion. This development further signifies the attractiveness of Brazil’s crypto market and its potential for future growth.

Brazil’s cross-border crypto trading landscape is primarily dominated by domestic exchanges. The report highlights the low involvement of Brazilian residents in international transactions, while domestic financial and non-financial companies drive the majority of cross-border trading volume. Despite fluctuations in trading volumes, the overall trend showcases a rise in adoption and engagement with cryptocurrencies in Brazil. With major players like Coinbase eyeing the Brazilian market, it is evident that the country’s crypto market holds immense potential and has a promising future.


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