Brazil is a prominent player in the Latin American cryptocurrency market. A Chainalysis report published in October 2022 stated that the country is the largest in the region in terms of cryptocurrency adoption. In addition, a report by Principal VanEck published in December of the same year indicates that Brazil could lead innovations in tokenization in 2023.
On Web3, the country is on its way to taking on a similar situation. Experts heard by Cointelegraph Brasil said that Brazil has what it takes to take on the role of the sector not only in the region, but also globally. However, there are gaps that need to be filled in to access this potential.
Web3 and blockchain in particular is at a promising moment in Brazil, believes Camila Rioja, Head of Latin America at Fundação Celo. She cites the investments made by large corporations and funds in startups in this sector.
“The numbers have shown the explosive growth and prominence of Brazil and Latin America. The Web3 and blockchain sectors will have a 42.1% lead by 2028 in Latin America, according to a report by LAMEA,” says Rioja.
Another survey highlighting Brazil, this one reported by Amanda Marquez, CMO of Lumx Studios, is from Statista, which puts the country in second place in terms of numbers of NFT investors. Marques believes this arrangement should make Brazilian Web3 enthusiasts more optimistic about the region’s potential, even though non-fungible tokens are just one of the layers of usability.
“With regard to the global scenario, I would like to take into account a cultural aspect of Brazil, which favors our long-term role in this market, which is the average time Brazilians are online. In addition, it is important to emphasize the high adoption of social networks, the power of influence creators and celebrities in the country,” adds Lumx Studios Chief Marketing Officer.
Rafaela Romano, co-founder of Impacta Finance, emphasizes the widespread adoption of NFT by Brazilians. It also adds data from other reports, such as the third place Brazil occupies in the number of decentralized finance users, and in studies indicating that 46 million Brazilians interact in some way with the cryptocurrency market. This data, in Romano’s view, highlights Brazil’s potential on Web3.
Gaps must be filled
However, they unanimously express reservations. Rioja, of the Celo Foundation, stated that there is still plenty of room to explore Brazil globally. “The country, in a way, has its local players and events feeding in, but in this current phase of international exchanges and partnerships, to further nurture local talent and opportunities, that becomes imperative.”
Amanda Marques, of Lumx, although she is optimistic about the educational scenario in Brazil for publishing information about Web3, stresses that there is still a lot to cover. “We still haven’t been able to get information about the potential of these technologies out to broad audiences.”
For Romano, from Impacta Finance, there is a lack of Brazilian leaders in global projects. I mentioned exceptions like the founders of CryptoKitties, the Dapper Labs Fingerprints group DAO, and DUX. “I think the next step is to really accelerate Brazil’s position in terms of development, since we are, in terms of adoption, very well positioned.”
Web3, Brazil, 2023
Reports trying to predict the most important cryptocurrency market narratives for 2023, published by large companies, have not left Web3 out. Given Brazil’s potential in this sector, it is only natural for enthusiasts to wonder which areas of Web3 will be developed by industry professionals in the country.
Rafaela Romano rates Brazil’s institutional situation as “extremely exciting”, and mentions a partnership between Selo and the Secretariat for the Coordination and Management of the Heritage of the Union (SPU). The purpose of the consortium is to create enterprise token solutions.
In addition, Romano also mentions the initiative jointly created by the government of Rio de Janeiro and Nasdaq to create a trading platform for carbon credits and digital and sustainable financial assets. As for what she’d like to see developed in Web3, she says she’s interested in seeing “solutions that help create marketplaces that address real problems.”
“In this sense, gaming plays a very interesting role in the process of democratization of access to investments and mass adoption in the sector,” adds the co-founder of Impacta Finance.
The government’s progress in the cryptocurrency sector is, for Camila Rioja, a strong point in Brazil. She cites the legal framework for crypto assets and Real Digital and the procedures and working groups of the Securities and Exchange Commission. In addition, Rioja lists a hackathon organized by the Celo Foundation in partnership with the Ministry of Economy, which, along with the previously mentioned cases, shows the government’s openness to blockchain technology. Finally, Rioja is focusing on ReFi, or Regenerative Finance.
“ReFi is definitely a unique opportunity that the community has been building over the past few years. The basic infrastructure to test, deploy and scale end-to-end solutions across all industries is already in place, and so is the market appetite.”
Amanda Marques says that the promotion of NFTs is also a point to note in the Brazilian scenario of Web3 this year. For her, 2023 will be a year of maturity for large brands and companies that use non-fungible tokens.
“A lot has been said in the past year, many brands are gradually starting their projects, and now they are reaping the benefits and understanding how to get more benefit from using this technology to solve real problems. More than ever, the time has come to strengthen the role of NFTs as an intermediary, ”says Marquez.
While it’s a new topic for major companies and leaders, Lumx’s chief marketing officer says the use of NFTs could have been made more realistic for this group. For this, the cases of traditional companies that have already positioned themselves on Web3 and have already begun to create disruptive projects, such as Starbucks, are used.
“To name some specific layers of use, I think we will see a significant increase in NFTs in loyalty programs, in the music market, in decentralized social networks, virtual identity, tickets to various events. It is necessary to consider that the Web3 ecosystem is very dynamic and constantly evolving, and we will probably witness The emergence of new areas and projects that we have not yet imagined, ”continues Marx.
Brazil Strengths on Web3
As for the tools and conditions Brazil can use to its advantage to stand out globally on Web3, they are diverse. Lumx’s Amanda Marquis emphasizes the large community of developers already in the country, and has closely followed the growth of technologies such as blockchain and artificial intelligence.
Additionally, Brazil has a highly engaged technology and innovation community, with many initiatives and discussion groups involving decentralized technologies and cryptocurrencies. This trend is expected to continue to grow as more accessible information becomes available in an uncomplicated way for everyone.”
The reaction of Brazilians to innovations, mainly related to social networks, was highlighted by Rafaela Romano, from Impacta. “We’re Internet addicts and early adopters,” says Romano. For her, this is a “super relevant asset” to the Web3 scenario, whose project success is directly linked to the strengths of their communities.
Romano also highlights the inclusion of natural assets in Web3. “I would imagine that Brazil also has many valuable assets: forests, the commodity market, energy. And those Amazon-related discussions could be moved to Web3. I’m excited to see how these valuable but not yet priced assets can help us create A good differentiator in the general cryptocurrency industry.”
High adoption rates of crypto assets, by Camila Rioja, make Brazil a friendly country for Web3 technology development. It also highlights the distinguishing features of Brazilians as early adopters, adding their openness to new financial services and products.
“Structural issues related to access to credit and the need to look at them from the perspective of regenerative financing, two points of paramount importance for the national context, find fertile ground in Brazil, but especially in Brazilians,” Rioja assesses.
The above scenario, combined with the quality of Web3 developers and entrepreneurs in Brazil, makes a future possible where the country leads the sector. “It is a sign that the next generation of cutting-edge blockchain-based solutions and products is coming to the continent,” Rioja concluded.