Things are not looking good for Brazil’s Real – news articles flooded with reports of a ten-year low of the Brazilian currency against the US dollar. After a turbulent presidential election and international oil prices hike, those factors finally hit the country’s economic very hard. Having said that, could bitcoin be a good way to protect one’s money? Acording to newspaper Folha de Sao Paulo, although bitcoin have been attracting small to medium retailers – there are already 100 retailers accepting bitcoin in Brazil – bitcoin users still shy away to actually make transactions using the cryptocurrency. It seems that bitcoin is more of a marketing tool rather than something that customer would use – many retailers use bitcoin as a sort of PR strategy to generate news about the brand/retailer.
On the other hand, bitcoin could be an interesting way to invest for Brazilians. On a Bloomberg article, Rodrigo Batista – president of the online brokerage Mercado Bitcoin – said that fear of inflation is a defining factor for people turning to bitcoins as Real continues to weaken. However, the lack of regulation by Brazil’s central bank could put a barrier to bitcoin’s growth.
Brazil’s Central Bank stated that bitcoin has yet to have systemic importance to be regulated under the law of payment methods, meaning the amount of transations using bitcoin in the country isn’t significant yet. I think it all has become a chicken-or-egg situation: would an appropriate regulation help to spread the use of bitcoin or not enough people use bitcoin because the lack of regulation? Only time will tell.
Bitcoin as currency is relatively very young – it has been around 6/7 years and it seems that not only in emerging markets but also on more mature economies are still afected by the lack of regulation. Regardless of that, a decentralised currency could be a way forward for a now unstable economy like Brazil.