Grupo XP, owner of XP investimentos SA – the country’s largest financial services provider – has announced it will be launching a bitcoin exchange in the coming few months.
The Rio de Janeiro-based company offers brokerage and advisory services as well as courses and lectures on investment. Reported to have been seeking valuation at up to $6.4 billion last year, XP investimentos SA is nearing its 20th year in business.
According to CEO Guilherme Benchimol, who spoke at a recent event in São Paulo, the planned bitcoin exchange is due to be named XDEX and will employ around 40 people.
Despite being home to Latin America’s leading fintech market, many Brazilians still view bitcoin and cryptocurrency with skepticism.
In fact, XP CEO Benchimol himself revealed that entering the crypto world wasn’t a decision that sat well with him. “I must confess, this is a theme I’d rather didn’t exist, but it does,” he said, reported Coingape. “We felt obligated to start advancing in this market.”
Benchimol’s words resonate with those of Brazil’s Central Bank chief Ilan Goldfajn, who last year dismissed the digital currency, comparing it to a bubble or pyramid scheme, whereby investors are introduced on the promise that it will appreciate in value. “The central bank is not interested in…illicit payments,” he added.
However, statistics prove that in Brazil, exposure to bitcoin is currently far higher than those who invest in stocks, which currently number around 600,000, in comparison to 3 million exposed to bitcoin. In 2017, the country’s bitcoin industry moved around US $2.4 billion.
More recently, Brazil’s largest banks have been climbing on board the blockchain wagon, as well as the Central Bank itself, which in June of this year announced the launch of a blockchain-based technology platform to ensure the exchange of information between financial regulators.
On top of this, the government is also making more of an attempt to understand the sale and purchase of cryptocurrency, last month sending an inquiry into Brazil’s largest crypto firms to improve understanding of their businesses. Although the digital currency remains unregulated, tax authorities recognise its earnings as income tax.
With the country’s economy at an all-time low, XP investimento SA’s move into the crypto-scene is a positive sign for Brazil, where the regulation of cryptocurrency is also an item on the political agenda for some of this year’s presidential candidates, including PPL (Free Fatherland Party) candidate João Goulart Filho.