Is Brazil the Next Frontier for Crypto?

The announcement last week by Ripple of a “major expansion of its presence across Brazil” should be viewed not just as a press release by a company but a broader sign of institutional digital asset adoption in one of the world’s fastest-growing financial markets.

And that adoption will only accelerate if Trump ally and crypto friend Flávio Bolsonaro is elected president this Fall.

According to Ripple’s announcement, Ripple will seek a Virtual Asset Service Provider (VASP) license from the Central Bank of Brazil (BCB). That accords to Brazil’s new virtual asset regulatory framework and also reflects the “compliance-first vibe” that has been Ripple’s hallmark over the company’s decade-plus history.

With the first round of voting scheduled for Oct. 4, current president Luiz Inácio Lula da Silva is seeking a fourth term. His challenger is Flávio Bolsonaro, the eldest son of former president Jair Bolsonaro, who has been indicted and on house arrest after disputing the results of the 2022 election that returned Lula to power.

Flávio Bolsonaro currently serves as a senator from Rio de Janeiro, but also works as a lawyer and businessman. His clients, according to the newspaper O Globo, have included former partners of Glaidson Acácio dos Santos, known as the ‘Bitcoin Pharaoh.’

Acácio dos Santos, arrested in August 2021, has been accused of all kinds of malfeasance, a Capone-like laundry list from fraud to drugs to attempted murder starring four hired gunmen. But the point is that the younger Bolsonaro should be considered to have at least a rudimentary familiarity with crypto.

The Lula government hasn’t been exactly “hostile” to crypto but has undertaken a heavy-handed regulatory framework that reflects a skepticism. Last week, Lula signed an “Anti-Gang Law” that confiscates digital assets from accused offenders and supposedly steers that money toward law enforcement.

Ripple is well-positioned to benefit from an intense regulatory regime, as the San Francisco company has always been regarded as eager to operate with authorities instead of the “ask forgiveness not permission” approach of much of crypto.

Indeed, Ripple’s president Monica Long commented, “We’ve spent more than a decade building the trust, licensing, and technology required to operate in regulated markets. Now, with our expanded platform, we can meet institutions across the region with everything they need to compete in the modern financial system.”

She added, “Latin America has always been a priority market for Ripple — not just because of the scale of the opportunity, but because Brazil has built one of the most advanced and forward-thinking financial ecosystems in the world.”