- Crypto.com received a Payment Institution License from the Central Bank of Brazil.
- The license will enable the exchange to continue offering regulated fiat wallet services for Brazilian customers.
- Crypto.com has been active in Brazil since November of last year, offering its customers Visa cards for making payments with local fiat and their cryptocurrencies.
Centralized crypto exchange Crypto.com (CRO) has received a Payment Institution License (EMI) from the Central Bank of Brazil, the company announced on Thursday.
The license will allow Crypto.com to continue to offer regulated fiat wallet services for users in Brazil, one of the most active Latin American countries in the crypto space. The license will also make Crypto.com the first licensed crypto exchange in Brazil.
The exchange has been present in Brazil since November 2021, when it introduced its Visa card for customers to make purchases with local fiat and their digital assets.
“Brazil and the entire LATAM market is a significant region in the pursuit of our vision of cryptocurrency in every wallet. We are incredibly proud to secure the license in Brazil, allowing us to lead as a safe, secure and compliant platform. We look forward to continuing working with regulators and authorities throughout the region in advancing cryptocurrency and blockchain technology,” said Crypto.com CEO Kris Marszalek.
Crypto.com has received various licenses from Singapore, France, the United Kingdom, the United Arab Emirates, South Korea, Canada, and others. That’s despite a tumultuous year for crypto markets, a reputational blow after the fallout of FTX, and a few public mistakes.
One of those was the transfer of 320,000 ETH, or nearly 85% of the exchange’s ETH reserves, to Gate.io, another centralized exchange. The latter then returned 285,000 ETH to Crypto.com. When users on Twitter found out about the transaction, Marszalek quickly responded that it was “an accident” and would never happen again.
However, others speculate that the funds were sent to Gate.io so that it would have a sufficient amount of assets to do a successful proof-of-reserves audit. This sparked a bank run on Crypto.com, which saw billions of dollars leave the exchange. Its native token, CRO, plummeted more than 50% on the news.
Increasing Crypto Adoption in Brazil
Brazil is one of the world’s leading countries in crypto adoption. According to a recent study done by Chainalysis, Brazil ranks seventh globally and first in Latin America.
While customers in Brazil use cryptocurrency for all kinds of purposes, Chainalysis’ study shows that the most prevalent crypto use-case in the country is speculative investment among retail and professional traders.
Speculative investing is much higher in Brazil than in other LATAM countries. For example, trading activity among professional and retail investors on Mercado Bitcoin, one of the largest Brazilian crypto exchanges, in Brazil is almost twice as big as in the rest of Latin America.
The Latin American market, especially Brazil, is highly sought by crypto exchanges. Binance, Crypto.com’s biggest competitor in Brazil, acquired brokerage Sim;paul, a company authorized to operate by the Central Bank of Brazil and the Securities and Exchange Commission. Binance has also opened two offices in Sao Paolo and Rio de Janeiro that house over 150 employees.
On the Flipside
- It’s unclear when Crypto.com’s license will take effect.
Why You Should Care
Crypto.com is one of the largest centralized crypto exchanges. The fact that the exchange managed to get a license in Brazil speaks to its credibility. However, investors should always verify the legitimacy of a project they’re putting their money into.