Key Points:
- Over 4 million individuals in Brazil are embracing the crypto space, enticing even decades-old financial companies to step into the segment.
- Itau, the largest private bank in Brazil and Latin America, has become the first among its peers to enter the realm of crypto trading services.
Financial technology firms and banks alike are venturing into the crypto business in Brazil, a highly sought-after market among Latin American users and a significant source for generating fee income among companies. Itau, the largest private bank in Brazil and Latin America, has become the first among its peers to enter the realm of crypto trading services. While large neobanks like Nubank and Mercado Pago, owned by online marketplace Mercado Libre, have already ventured into brokerage services over a year ago, Itau’s entry signals a significant step for traditional banks embracing the crypto landscape.
In a notable move, Itau, the largest private bank in Brazil and Latin America, has become the first among its peers to enter the realm of crypto trading services. While large neobanks like Nubank and Mercado Pago, owned by online marketplace Mercado Libre, have already ventured into brokerage services over a year ago, Itau’s entry signals a significant step for traditional banks embracing the crypto landscape. With nearly 100 million customers in Brazil, the bank has faced challenges from nimble challenger banks that rapidly signed up millions of customers. Initiatives like venturing into crypto services showcase a 20th-century institution’s ongoing efforts to compete with neobanks, leveraging strategic rollouts to keep pace with the innovation of their more agile counterparts.
Indeed, major players like Nubank and Mercado Pago had already set foot in the crypto space in 2022, experiencing remarkable success. Their swift traction underscores the substantial demand in Brazil and Latin America for stablecoins and crypto. Within just one month of its June 2022 launch, Nubank announced it had already attracted one million customers to its crypto offerings.
In Brazil, Itau has adopted a cautious approach, stating that it will gradually introduce this new feature for a select group of customers. The speed at which it can expand its services to the rest of its clients hinges on “regulatory certainty,” according to Guto Antunes, the head of Itaú Digital Assets.
Presently, the Brazilian crypto market anticipates comprehensive regulations outlining how companies can engage with digital assets. A framework for Crypto Assets was approved at the end of 2022, later complemented with a decree designating the Central Bank as the overseer of the sector. In July, the number of individual cryptocurrency investors in Brazil surpassed 4 million, as reported by the Brazilian Federal Tax Agency.
In the second half of this year, two digital lenders in the country—online broker XP and the PicPay digital wallet—decided to sunset their crypto services in Brazil.
