– Brazilians are turning to stablecoins as a way of shielding themselves from the volatility of economic circumstances.
– Exchange executives have declared that demand for stablecoins has skyrocketed during 2022, and exploded during the last months of the year.
– Tether’s USDT is one of the assets that recorded a significant increase in demand from Brazil.
In the wake of the inauguration of the new government of Luis Inacio “Lula” Da Silva, Brazilians are turning to stablecoins as a way of shielding themselves from the volatility of economic circumstances. Stablecoins provide a way to hedge against asset market volatility, by allowing investors and companies to take refuge in the U.S. dollar.
Executives from several exchanges have declared that demand for stablecoins has skyrocketed during 2022, and exploded during the last months of the year. Jose Artur Ribeiro, CEO of Coinext, a national exchange, told local newspaper O’Globo about the benefits that using stablecoins presents, versus using dollars in bank accounts. He stated: “Stablecoins do not pay an administration or performance fee. Those who know how to manage money prefer to leave management to themselves. And the stablecoin has an absolutely liquid market that works 24 hours a day reflecting the market price.”
Thales Freitas, CEO of Bitso in the country, indicated that the volume of stablecoin trading grew by 85% in 2022 and that the platform has observed greater interest of Brazilians for these cryptocurrency assets. He explains that small and medium-sized companies, and individuals going abroad, are the ones fueling the demand for stablecoins.
Ribeiro added that USDT, the dollar-pegged stablecoin issued by Tether, was one of the assets that recorded a significant increase in demand from Brazil. He stated that the use of these coins increases “the security of those who do not have full confidence in the traditional banking system, since they are not subject to the same rules as banks.”
The increased demand for stablecoins in Brazil shows that people are looking for ways to protect themselves from economic volatility. With the current economic uncertainties, it is likely that the demand for stablecoins will continue to rise in the future. It is a sign that people are looking for alternative solutions to protect their money, and that stablecoins are becoming increasingly popular as a way to achieve that goal.
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