The governments of Brazil and Puerto Rico are promoting new initiatives to support the use and adoption of cryptocurrencies as an alternative solution to the current financial crisis and a key element for development and innovation.
Brazil is following in the footsteps of El Salvador to become an attractive country for those operating with Bitcoin (BTC) and other cryptocurrencies, . Recently, the mayor of Rio de Janeiro, Eduardo Paes, reported that the city, the most populated in Brazil, will become “the Technology Capital of South America”.
To consolidate his plans, Paes said that Rio de Janeiro will invest part of its treasury in Bitcoin and will develop its own cryptocurrency, in collaboration with the City Coin project. Rio de Janeiro could invest up to 1% of its Municipal Treasury, Paes said. In addition, the mayor said that its future cryptocurrency, called RioCoin, will serve to boost the development of technology and innovation in the city. Like the city coins of Miami and New York, RioCoin will be developed on the RioCoin protocol. smart contracts Stacks, based on the blockchain Bitcoin.
"We are going to launch Crypto Rio and invest 1% of the Treasury in cryptocurrency", Paes said.
With these initiatives, Rio de Janeiro will be the first city in Brazil and Latin America to maintain municipal reserves in Bitcoin and develop its own cryptocurrency. Paes made these statements during the Rio de Janeiro Innovation Week; a conference that was attended by more than 1.200 attendees and 190 exhibitors, including the pro-bitcoin mayor of Miami Francis Suarez.
On the other hand, other regional and national governments in Latin America, such as Puerto Rico, are also speaking out in favor of crypto adoption, viewing cryptocurrencies as a potential solution to the financial crisis experienced in several areas of the region.
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Brazil, Bitcoin and cryptocurrencies
In addition to the recent plans announced by the mayor of Rio de Janeiro during the Innovation Week conference, Brazilian regulators and the national government are also taking important steps to embrace and regulate the crypto industry in their territory.
In the middle of last month, the Brazilian Chamber of Deputies approved a bill that seeks to recognize and regulate the trade and sustainable mining of cryptocurrencies as legal activities in the country. Through this proposal, Brazil can become one of the most attractive countries in Latin America for the development of the crypto industry. On the other hand, Brazil is also looking into the possibility of eliminating taxes on cryptocurrency mining, for those that adopt renewable energy sources. to sustain its activity. In addition, it plans to start pilot tests for a CBDC own this year.
ETFs for Bitcoin and Ethereum
The country has also been at the forefront of cryptocurrency investment through financial instruments such as ETFs, being the first country in Latin America to lanzar exchange-traded funds for Bitcoin and Ethereum last year.
Overall, Brazil wants to establish a clear regulatory framework for cryptocurrencies, which will allow for the healthy and sustainable development of the industry while ensuring the security and protection of its investors, through compliance with AML regulations, to combat financial crimes and ensure the transparency of operations.
Puerto Rico also follows El Salvador
In Puerto Rico, Governor Pedro Pierluisi is also pushing cryptocurrency investment, offering quite attractive alternatives for investors in this industry. Pierluisi is tempting cryptocurrency investors with the tax benefits offered by the island, comparing the taxes that high-income investors must pay in the United States with those required in Puerto Rico.
During a interview In Bloomberg, Pierluisi pointed out that investors must pay up to 20% in capital gains taxes and up to 37% on short-term profits, if they are located in the United States; while, in Puerto Rico, they must pay nothing. As for companies, Pierluisi also pointed out that those based in the North American country pay 21% federal corporate tax plus an additional individual state tax. Again, comparing with Puerto Rico, the governor pointed out that in his territory companies must only assume 4% corporate tax.
Blockchain and smart contracts
In addition to encouraging crypto investment by offering low taxes, Puerto Rico is adopting blockchain technology to minimize the rate of corruption in government management. Bloomberg he pointed that the government is planning to implement smart contracts and blockchain-based protocols to minimize the corruption and bribery scandals that have shaken the entire population for years.
Cryptocurrencies in Latin America
La Bitcoin Law The law that El Salvador implemented in September 2021 to make BTC its legal tender has motivated several countries in the region to join the adoption of cryptocurrencies. The economic crisis, accentuated by the Covid pandemic, inflation levels and political challenges have also been key to crypto adoption in the region. Several Latin American governments see in cryptocurrencies an opportunity for growth and development and, in the underlying technology of these digital assets, the potential to increase the transparency of their management.
Colombia, regulatory sandbox
In Colombia, the cryptocurrency market is also seeing a lot of momentum and adoption. Since last year, it has been possible to pay for some real estate using cryptocurrencies in the Latin country. National banks, such as Bancolombia, Davivienda and Banco de Bogotá, participate in a regulatory sandbox promoted by the Colombian Financial Superintendence together with several of the largest exchanges in the world, to accept cryptocurrency trading.
As well, Businesses such as Olfabrand, Falabella, Éxito and many others are joining the adoption of payments with crypto assets. While the municipal government of the Mayor's Office of Bogotá and several renowned universities are also adopting blockchain technology to minimize corruption and maximize transparency. The Ministry of ICT and the Ministry of Culture of Colombia also support the development of projects such as “B Coins”, created by entrepreneur Henry Jean Velásquez, to educate school-aged children about the potential and opportunities of cryptocurrencies. “B Coins” It is a kind of digital game that teaches children how to invest in stocks and crypto assets.
Real estate with Bitcoin
In Mexico, although government authorities have spoken out against cryptocurrencies on several occasions, declaring them illegal assets in the country, citizens continue to rely on these digital assets as an alternative financial solution. Recently, The real estate agency La Haus celebrated the first sale of a property paid for with Bitcoin; while the Elektra chain of stores, owned by billionaire Ricardo Salinas, became the first in the country to accept payments with this cryptocurrency.
Other Latin American countries where cryptocurrencies have also been welcomed include Paraguay, Panama, Cuba and Venezuela.
The growth and adoption of cryptocurrencies in the region is also driving new professional and value opportunities for thousands of people who are training in new technologies. According to LinkedIn data, job offers related to cryptocurrencies and blockchain technology grew by almost 400% in the last year.
Continue reading: Cryptocurrencies, the driving force of emerging economies in Latin America and the world
