Brazil: President Rejects Cryptocurrency but Central Bank Head and Others are in Support

Since cryptocurrencies became a part of the world’s financial sector and it began buzzing, views have largely being polar. There are many people who think cryptocurrencies are fantastic and some of them are so bullish that their enthusiasm is sometimes newsworthy. However, in the same way, there are a large number of people who are not just pessimistic but think that crypto is ultimately a bad idea.

Some of these people are key members of their respective governments, one of whom is Ben Sherman, a United States Congressman who sometime in May this year, admonished his colleagues to collectively do everything in their power to outlaw cryptocurrency. Other governments including China are on this list too, disallowing cryptocurrency related events and almost forcing certain service providers to discontinue cryptocurrency service. Now, the Brazilian president may have joined this group.

During a recent television interview, President Jair Bolsonaro talked about certain challenges he currently faces in his role as president. One of the things he mentions as a challenge is a blockchain project backed by the government to produce a digital asset which can easily offer financial services to Brazilians whether or not they have other bank accounts.

Bolsonaro began his tenure as the 38th President of Brazil on the 1st of January, 2019 and one of the first things his administration did after assuming office was to completely discontinue the project. The project was initiated by The National Indian Foundation (Funai) and the Fluminense Federal University (UFF) with the aim of lending a helping hand to the indigenous people in the nation. Less than a month after Bolsonaro resumed office, Brazil’s Ministry of Human Rights, Family and Women vetoed the project.

This is however the first time the president is speaking about the $11.5 million project and he said:

“We are cutting expenses. We were about to us 40 million Reais to teach natives to use Bitcoin.”

A little later, Bolsonaro answered “I don’t know. Is it a coin?” when he was asked about Bitcoin.

Regardless, Brazil is Pro-Crypto

Notwithstanding Bolsonaro’s vocal aversion to cryptocurrency, there are others in his administration that don’t share his reluctance and would like to continue to grow the sector in Brazil. The president of Brazil’s Central Bank is no stranger to cryptocurrency and has expressed a desire to prepare the Central Bank of Brazil for the “future market”.

According to him,

“I have studied and dedicated intensely to the design of what will be the financial system of the future. I participated in studies on blockchain and digital assets. One of the contributions I hope to bring to the Central Bank is to prepare the institution for the future market, where technologies advance exponentially, generating more rapid transformations.”

While the president might be less than interested, the atmosphere in Brazil regarding cryptocurrency is not hostile at all. As far as the Latin American crypto market is concerned, Brazil is still the largest. The country suffered an increase in inflation in April this year and in that same month, Brazil recorded trades over 100,000 Bitcoins in a 24-hour period.

Ripple is also taking advantage of the country’s fertile crypto sector, opening a branch in Brazil.

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