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The crumbling of the FTX crypto empire may have damaged Brazilian retail and institutional sentiment toward crypto. However, its impact won’t affect everyday citizens \u2014 who will still use crypto for cross-border transactions.<\/p>\n
Reflecting on the recent fall of FTX, Thiago C\u00e9sar, the CEO of fiat on-ramp provider Transfero Group said that the exchange\u2019s fall, like in many countries around the world, has hurt confidence around centralized crypto exchanges and crypto in general.\u00a0<\/p>\n
Transfero Group is tied in closely with the Brazilian crypto ecosystem and FTX as it was the fiat on-and-off-ramp provider for the exchange and is also the issuer of Brazilian Stablecoin BRZ, which was listed on the now-defunct exchange. <\/p>\n
C\u00e9sar told Cointelegraph that the collapse of the exchange had removed a \u201cbig liquidity source\u201d from the market, as FTX was ranked within the top three in terms of trading volume.\u00a0<\/p>\n
He also noted that uncertainty surrounding centralized crypto exchanges caused a \u201cbig outflow of funds\u201d from exchanges in Brazil, with many looking into self-custody \u2014 estimating at least 20% of trading volume has been lost on exchanges so far. <\/p>\n
\u201cA lot of people are trying to even liquidate whatever positions they have in crypto and we just hold money in the bank account.\u201d<\/p><\/blockquote>\n
C\u00e9sar noted the FTX saga will make crypto investment a \u201charder sell\u201d for new investors and traders.<\/p>\n
\u201cFor the crypto investor\/trader of course. It\u2019s a harder sell now. If you go to a person who is not crypto savvy and you try to convince him to invest, especially in Brazil \u2014 the population has always been very skeptical of crypto. Now it’s harder,” he said.\u00a0<\/p>\n
However, he notes that for people that use crypto as a means for cross-border payments or the \u201cinternationalization of money,\u201d there will unlikely be any impact from the FTX collapse. <\/p>\n
\u201cA lot of the crypto volume in Brazil derives from players that are willing to exchange their local currency into an internationally liquid asset denominated in dollars. So in that sense, the market will not die down because crypto is just rails for that.\u201d <\/p>\n
In October, a report from Chainalysis found that remittance payments<\/a>\u00a0and battling inflation were two of the most significant drivers of crypto adoption in Latin America.<\/p>\n
Related: <\/em><\/strong>Brazilian SEC seeks to change its role in cryptocurrency regulation<\/em><\/strong><\/a><\/p>\n
C\u00e9sar said the FTX collapse will likely be used by local exchanges “as a lobbying tool” to push for regulations aimed at bringing international exchanges in line. <\/p>\n
C\u00e9sar added that these crypto exchanges had been pushing for regulation in Brazil that would \u201csegregate\u201d local and international exchanges by taking away international exchange\u2019s access to their global liquidity books. <\/p>\n
\u201cThey were proposing that regulation would enforce for example, that liquidity on the books in Brazilian reais be segregated from international books.\u201d<\/p>\n
C\u00e9sar explained that such regulation would hurt international exchanges as their main advantage comes from liquid, international global books. <\/p>\n