Brazil is one of the largest FinTech markets in the world, but, most importantly, it is the largest market in Latin America. There is no doubt that this is one of the countries we must discuss and learn more about to understand the global scale of FinTech innovations and developments.
What did 2020 look like?
Last year was a successful year for the FinTech market in Brazil. Despite the pandemic and everything that changed along with it, Brazil’s FinTech industry attracted US$ 1,7 billion in investments in 90 deals — that is a significant growth compared to the US$ 910 million in 2019.
Some of the significant milestones that Brazil reached was the introduction of important regulatory and infrastructure changes, such as:
- SUSEP’s regulatory sandbox is already in operation to boost the testing of more and more innovative solutions.
- Movement in the Open Banking regulations.
- Pix — the local instant payments system that is seen as the groundbreaker for future development and growth, as it gains scale and becomes more popular.
Brazil’s CBDC
In August 2020, Brazil’s central bank — Banco Central do Brasil (BCB) created a study group with an objective to study the potential central bank digital currency, to evaluate potential benefits and impacts of issuing a digital Brazilian Real.
Now, the BCB has released general guidelines to further foster the discussion. They have acknowledged the need to open a discussion with the private sector and society in general before moving forward and deciding on a CBDC project.
Who regulates the industry?
The highest regulatory authority in Brazil is the Brazil Monetary Council that together with the central bank regulated the financial services. There are many services that are regulated by these or other authorities and supervisors; however, a FinTech providing pure technology services might stay out of the scope of regulations.
There is no specific regulation towards cryptocurrencies and cryptoassets; however, there is a normative ruling by the Brazilian Federal Revenue Department that asks individuals or legal entities to report information on transactions performed with cryptoassets.
