Analysts believe that, in the future, outflows from cryptocurrency purchases could affect the domestic exchange rate in Brazil. The Central Bank of Brazil pointed out that crypto assets and entertainment services accounted for $14.7 billion in outflows from Brazil in August, alluding to the use of virtual assets as a means of payment.

Cryptocurrency Outflows Dangerous for Brazil’s Domestic Exchange Rate, Experts Warn

The rise in cryptocurrency adoption has experts concerned about the potential harmful effects of these virtual assets in Brazil. While cryptocurrency outflows from Brazil remain relatively low and can be offset by other inflows, economists and analysts predict that if they continue to increase, they could impact the country’s domestic exchange rate.

According to central bank data, outflows from cryptocurrencies and entertainment services (including betting) reached $14.7 billion from January to August. This growing figure also affected the current account deficit due to a stronger economy and higher imports. “The picture is still good, but we definitely have a problem,” stressed Luis Afonso Fernandes Lima, research director at Mapfre Investimentos.

The unpredictability of cryptocurrency outflows is a concern, as they cannot be estimated due to their unpredictable behavior. However, some believe that the increase is related to the adoption of cryptocurrencies by Brazilians as a payment method. Stablecoins may play a big role in this, as they have become popular in Brazil, with banks being asked by their customers to conduct transactions using stablecoins.

However, some also believe that there may be companies overseas experimenting with cryptocurrencies, given the reported large numbers. Ouribank's head of product, Pedro Guimaraes, stated:

The amount of crypto in the capital account is too high for investors to speculate or dollarize in stablecoins.

Other economists see no problem with this imbalance. Lívio Ribeiro, a partner at BRCG, assessed that such moves could only be dangerous if they were linked to illegal activities.

What do you think about the increase in cryptocurrency outflows in Brazil? Let us know in the comments below.
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