Members of Brazil’s bitcoin community say that while past issues have contributed to the current weak market, more important hurdles remain. A lingering regulatory uncertainty, a relative lack of merchant adoption and the limited availability of Portuguese-language bitcoin resources, they said, are all reasons why Brazil’s market has yet to ignite.
For better or worse, the story of bitcoin in Brazil begins with Leandro César Marciano. An IT consultant from Belo Horizonte, Marciano founded and later sold the country’s largest bitcoin exchange Mercado Bitcoin following an alleged security breach, and launched Bitcoin Rain, an investment scheme suspended by the government and later likened to the infamous US ponzi scheme, Bitcoin Savings & Trust.
Harder to calculate is the effect that Marciano’s services had on early tech adopters who, unlike their peers internationally, may not have been able to enjoy bitcoin’s meteoric rise in value to more than $1,000 at the end of 2013.
Local entrepreneurs like Andre Horta, CEO of bitcoin and litecoin exchange BitcoinToYou, are unsurprisingly eager to put the shadow of Marciano and Bitcoin Rain behind them as they look to alter this narrative and tackle more pressing issues. “I prefer not to talk about this, because I prefer to look to the future,” Horta said.
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While Argentina has seen a host of bitcoin startups and organisations that have received international investor and media attention, Brazil arguably hasn’t risen to prominence within the bitcoin community. This is despite that fact that publically available data on Bitcoin-QT wallet downloads suggests Brazil may have twice as many bitcoin users as Argentina and the most in South America.
Rafael Olaio, co-founder of Brazil-based Ripple gateway provider Rippex, said that he believes adoption figures are high due to this international hype surrounding bitcoin as an investment opportunity and technology, but that to date, entrepreneurs have done little to translate this initial interest into a dedicated user base.
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Yet another reason bitcoin has generated less interest in Brazil is that the country’s native currency, the real, has proven to be more reliable than the government-backed options available in its neighboring states.
As in most countries, regulation is still cited as a major roadblock for the local market. To date, Banco Central do Brasil has issued a warning to consumers, while Receita Federal (RF), the country’s tax authority, has ruled that bitcoin sales are subject to capital gains. However, for local bitcoin startups, communication has been in short supply.
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