Welcome to Latam Insights Encore, a deep dive into Latin America’s most relevant economic and crypto news from the past week. In this edition: we examine the astounding growth of crypto in Brazil and how adoption is outpacing the government.
Latam Insights Encore: Brazil’s Crypto Adoption Is Leaving Its Government Behind
Brazil, one of the largest economies in Latin America, has shown that there is a great divide between its bottom-up adoption of crypto and the top-down approach to industry regulation.
The latest report from Chainalysis, a top blockchain insights firm, found that Brazil had experienced an exponential growth in its crypto transaction volumes, becoming Latam’s de facto crypto hub. According to the firm, the Brazilian economy transacted $318.8 billion in cryptocurrency assets from July 2024 to June 2025, marking a milestone for the country’s digital asset economy.
And it not only broke previous numbers, but it more than doubled its previous mark, signaling a strong move to these assets from both institutions and retail users.
These numbers, which left behind other large crypto economies in the region, like Argentina and Mexico, come after the Brazilian authorities had been executing unpopular measures targeting crypto users.
The latest one is related to a Provisional Measure enacted by President Lula that terminated crypto tax exemptions and established a flat tax fee on crypto holdings, including assets held in self-custody.
I have already referred to the possible outcome of these measures, anticipating an exodus to unregulated platforms and decentralized protocols to sidestep these government efforts.
Nonetheless, what’s more relevant is that the current situation shows a divorce between the everyday Brazilian, who wants to use crypto, and the Brazilian authorities, who instead put barriers to discourage this.
The Brazilian government should take this into account and change its forms to become more lenient with a technology that has already found its foothold in Brazilian soil. If it fails to do so, it risks making its rules and regulations irrelevant, given the nature of crypto.