Brazil’s biggest independent brokerage, Grupo XP, the owner of XP Investimentos SA is going to make inroads into the cryptocurrency market. Bloomberg reported that the brokerage’s CEO, Guilherme Benchimol, made an announcement at an event held in Sao Paulo, confirming that the brokerage will be launching an exchange for Bitcoin and Ethereum in the upcoming months.
The CEO told Bloomberg that the exchange, which will be called XDEX, will be set apart from XP’s other brokerage business. Bloomberg also reported that XP is aiming to achieve $245 million under custody by 2020, four times the anticipated amount for the end of 2018. Additionally, the next few months will also see the brokerage launching a bank.
Drivers
Benchimol said that the popularity of cryptocurrency investment was the driving force behind entering into the crypto business. 3 million Brazilians having exposure to Bitcoin compared to only 600 000 that invest in the stock market(1).
The announcement from Benchimol coincides with Brazil’s new regulatory framework, outlining tax laws in relation to cryptocurrencies. Finance Magnates reported that the Securities and Exchange Commission of Brazil offered this guidance to fund managers who are looking at adding cryptocurrencies to their portfolios(2).
According to Reuters, Brazil’s Administrative Council for Economic Defense (CADE) began an investigation into the top 6 banks last week, which according to Reuters was for allegedly using their market position to corner the cryptocurrency trade to the disadvantage of brokers(3).
Brazil embraces digital assets
According to Forbes,(4) “A year ago, an exchange called Foxbit had roughly 100,000 registered users. Today, it exchanges around 2,000 Bitcoin to and from Brazilian reals daily and has a 36% market share. They also have 400,000 registered users out of the estimated 1.4 million that have opened accounts with them and their three main competitors in less than two years’ time. Compare that to the roughly 600,000 who have stock brokerage accounts and it’s plain to see: Brazilians have discovered cryptocurrency.”
- https://cointelegraph.com/news/largest-brazilian-brokerage-to-launch-exchange-for-bitcoin-and-ethereum
- https://www.financemagnates.com/cryptocurrency/news/brazil-cryptocurrency-not-financial-asset/
- https://www.reuters.com/article/us-brazil-antitrust-cryptocurrency/brazil-antitrust-watchdog-probes-banks-in-cryptocurrency-trade-idUSKCN1LY31G
- https://www.forbes.com/sites/kenrapoza/2018/05/30/more-people-opening-crypto-trading-accounts-in-brazil-than-traditional-securities/#754bc3987e21
