The real, Brazil's official currency, is facing a serious economic and social crisis, with accumulated inflation of 700% in the last four years, according to the Brazilian Institute of Geography and Statistics (IBGE). This situation has affected the purchasing power of Brazilians, who see their salaries and savings lose value every day.
Since its creation, the Real has suffered a strong devaluation and loss of purchasing power, caused by inflation of more than 677.50% in the last four years. Therefore, R$1.00 from 1994 is worth only R$0.12 today and R$100.00 from 1994 is worth only R$12.00 today.
Faced with this scenario, many Brazilians have been looking for alternatives to preserve their assets and carry out financial transactions. One of them is the digital economy, which offers solutions based on technologies such as blockchain, cryptocurrencies, fintechs and payment applications.
According to data from the Brazilian Cryptoeconomics Association (ABCripto), the number of investors in cryptocurrencies in Brazil jumped from 1.4 million in 2019 to 8.6 million in 2023, a growth of more than 500%. Furthermore, the volume traded on cryptoactive platforms in the country exceeded R$100 billion in 2023, an increase of 250% compared to 2019.
Cryptocurrencies, such as bitcoin, ethereum and tether, are digital assets that function as a means of exchange, store of value and unit of account, without depending on intermediaries such as banks or governments. They are protected by cryptography and registered on a decentralized computer network, called blockchain, which guarantees their security, transparency and immutability.
For Brazilians, cryptocurrencies represent a way to escape inflation, diversify their investments and have more financial freedom. Furthermore, they allow you to carry out faster, cheaper and global transactions, without bureaucracy or restrictions.
Another trend that has gained strength in Brazil is the use of fintechs and payment applications, which offer digital financial services, such as accounts, cards, loans, insurance, investments and transfers. These platforms stand out for their practicality, convenience, cost-benefit and innovation.
According to the Fintech Mining Report 2023, prepared by Distrito, there are 1,038 fintechs in Brazil, an increase of 34% compared to 2019. Together, they generated R$230 billion in 2023, an increase of 180% compared to 2019. In addition In addition, they served more than 100 million customers in the country, a growth of 150% compared to 2019.
Fintechs and payment applications, such as Nubank, PicPay, Mercado Pago and PagSeguro, have benefited from the digitalization of Brazilians' consumption habits, especially after the Covid-19 pandemic, which accelerated the adoption of online solutions . They have also taken advantage of the opening of the Brazilian financial market, with initiatives such as open banking and PIX, which encourage competition, inclusion and innovation.
The real, Brazil's official currency, is heading towards the digital economy experiencing 700% inflation that has eroded purchasing power. This is the reality of millions of Brazilians who are looking for new ways to deal with their financial resources in a scenario of uncertainty and instability. The digital economy emerges as an alternative to face the challenges and opportunities of the 21st century.
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