The IMF said Brazil’s stablecoin market has grown rapidly since 2017, with cross-border crypto flows growing faster than traditional capital flows.
The International Monetary Fund said Brazil’s market for crypto assets, particularly U.S. dollar-pegged stablecoins, has grown rapidly since 2017 and requires closer monitoring as cross-border crypto flows are growing faster than traditional capital flows.
In its assessment of the stability of the financial system released On Thursday, the IMF said stablecoins played a key role in the significant growth of Brazil’s crypto asset market. The report states that cross-border crypto flows have “steadily increased” and that stablecoin purchases are two to three times more sensitive to global shocks than traditional portfolio investments or foreign direct investment flows.
The IMF said Banco Central do Brasil (BCB) has already taken steps to regulate crypto asset service providers, but gaps remain in areas such as customer asset protection, stablecoin issuance rules, and anti-money laundering (AML) and anti-terrorist financing (CFT) compliance. “The crypto-asset market in Brazil is large, rapidly growing, and increasingly interconnected with the traditional financial system,” the report said.
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