Understanding the Success of Spot Bitcoin ETFs in Brazil

The state of crypto is presented by Tron connecting the world to the power of Cryptocurrency. The Brazilian Senate approved new income tax regulations that could mean citizens will face paying up to 15% on earnings from crypto. Held on international exchanges. If the regulation is sanctioned, it could be in effect as early as January 1st joining us now to discuss this and the crypto landscape in Brazil is BT G Pactual head of Digital Assets, Andre Portillo, Andre. Welcome. Hi, how are you doing? Welcome. Uh Thanks for having me. I'm doing great. Thank you for joining me. Now, let's talk about this new uh tax rule that could be implemented in the new Year. Talk to us about what's going on there. What does this mean for crypto businesses and folks interacting with crypto uh in the country? Ok. Well, uh at the end of the day, I mean, the government in Brazil is pursuing several different measures to increase uh their uh earnings. Ok. And uh it is important to notice that we already have a very uh robust uh framework for taxation in the local market in Brazil. So what's being done at the end of the day is just uh putting uh the offshore uh exchanges activity at par with what already happens in the exchange in local Brazilian markets. So at the end, at the end of the day is just well, uh uh pairing up everything. So it gets uh uh clear. So I, I don't see uh too, too much impact on that on the uh activity for Brazilian clients. All right. Also in the New Year, the United States is waiting in anticipation for the approval of a spot. Bitcoin ETF, we all know Brazil has had a spot, Bitcoin ETF for a few years now. What's demand been like there? And what do you think that can tell us about what to expect in the United States if, if we get an approval? That that's a very interesting question because uh when we launched our spot ETF uh back some years ago uh was in a, I mean, very good market conditions and the demand was huge, especially from uh rite and institutional clients. Brazil uh was one of the first, I would say more traditional instruments that people can access uh Bitcoin uh in the Brazilian market and the success was uh was astonishing. Um I think we can see a similar effect when we have a spot uh ETF in the US, although we already have some uh very good companies in Rios uh in crypto uh in the US already functioning. So I'm not saying I expect the same effect that we had in Brazil when we launched our, our spot TF But definitely, I think there will be a uh a lot of demand for those products coming not only from like uh institutional clients, uh but also from retail clients that will they will be able to interact with uh Bitcoin uh in Iter in the, let's say traditional channels in radio that you already have. So uh uh we are very excited about that. I guess on that note, uh some folks are expecting the price of Bitcoin to rally on the approval of a spot, Bitcoin. ETF. Do you think that will happen or do you think that an approval is already priced in II I think the market price is a big chunk of the uh impact already? OK. But uh what we are seeing is uh most of the uh biggest asset manners in the world uh sponsoring these ETF S. So our vision is that we can even have a longer effect on prices with these ETF S is important to notice that uh the, the the first order uh effect is OK, how much we're gonna see in terms of flow for these instruments? But on a second order effect, we will see uh the selling machine of these institutions like fidelity blackrock, uh spreading the news in the narrative about Bitcoin and crypto and that is very important for the market. All right, we don't have a whole lot of time left. But I got to ask you about stablecoins. I know back in April BT G pad to launch a dollar back stablecoin through its crypto platform mint. How's demand been for that stablecoin and talk to us a little bit about staple coin adoption in Brazil? Uh Well, actually, I mean, um our vision is that well, stable coins are the killer app in crypto. OK. Uh Money is going on chain, OK. And uh when money goes on chain, uh we're probably gonna see uh a mix of instruments like uh CBD C Tonni deposits and stable coins working together depending on each jurisdiction in country. OK? But definitely this is uh it's an instrument that is already uh heavily used in the crypto industry. And our vision is that it will gradually as soon as we have some more, let's say clear regulation, stable points will move to more traditional markets uh for payments, cross border settlement. And on top of all of that, being able uh to add programmability to the, let's say traditional financial instruments. So we are very excited about that. Uh Brazilians use a lot of stablecoins. Uh not only to have exposure to us d strong currency but also to do uh some other transactions and payment as well. So, I mean, we are very excited with this uh new front of developing as well. All right, Andre, we will continue to follow the developments in Brazil Thank you so much for joining and providing some insight. Thanks for having me. That was BT G Pactual head of Digital Assets, Andre Portillo.