Why is Brazil, a country of contrasts, where the poorest use crypto the most?
Brazil is a country of contrasts. It is not only the richest country in Latin America, but also the biggest and most populated. It has circa 212 million inhabitants, making it the fifth largest in the world, according to Forbes.
The South American country is also arguably one of the most exciting in the world in terms of opportunities as the median age among their population of 32, which makes it vastly appealing for international digital and financial tech investments.
The poverty line
World Bank statistics show that about 25% of the people in the country live under the poverty line. Brazil has one of the lowest minimum wages in Latin America. It is currently around $234 a month.
The South American country ranks high in many areas of digital adoption, including mobile phone usage, apps download, time spent on the internet and cryptocurrency, to mention a few. It also has a large unbanked population (25% or 55 million) and while having one of the lowest minimum wages in the region, it has the largest number of billionaires.
Banking on mobile phones
When it comes to mobile phone banking, the number of downloads increased by over 100%, second only to India. According to a eMarketer report mentioned by PagBrasil, 81% of mobile owners in Brazil access their bank account via smartphone app. For instance, Banco do Brasil’s app was one of the top 10 most downloaded apps in 2018.
A 221-page Global Digital Report by Hootsuite and We Are Social, reveals that Brazil is the fifth country in the world in terms of owners of cryptocurrency.
Brazil is representative of Latin America that brings together more cryptocurrency-active owners, ahead of Colombia (7.7%), Mexico (5.9%) and Argentina (4%), the report adds. The ranking is led by South Africa (10.7%), followed by Thailand (9.9%), Indonesia (9.5%) and Vietnam (9.1%).
Brazil ranks seventh on the list of countries with the highest number of cryptocurrency exchanges, according to The Next Web.
According to a 77-page report by the Business Administration School of Sao Paulo, the average Brazilian market participant has two or three cryptocurrencies in their wallet. Ninety-two percent of the crypto users are male, and regardless of gender, 40% of crypto holders are 20 to 25 years old. The age groups 26–30 and 31–40 respectively represent 20%.
The most interesting statistic, however, is that 40% of those holding crypto in Brazil earn below the countries minimum wage. Lastly, the Bitcoin trade has exceeded the volume of gold, which could be an indication of where crypto adoption is headed in Brazil.
Regulations and further crypto adoption
The Brazilian Congress is currently revising cryptocurrency regulations as it seeks to implement rules as a response to the increased interest in crypto across the country. As an example of increased adoption, there is a major coffee bean cooperative, Minasul, who have plans to launch a blockchain-based digital coin backed by coffee supplies. The crypto called “Coffeecoin” will enable farmers to purchase fertiliser, machinery, as well as other non-farming products, including autos and food, said Minasul President Jose Marcos Magalhaes during the Global Coffee Forum, according to Bloomberg.
The farmers will use Coffeecoin in a Minasul-backed digital marketplace that will include mobile phone access, which comes in handy in a country where smartphone usage is increasingly high.
The only Portuguese-speaking country in Latin America is also a very young one with a median age of 32. Brazilians use social media more than almost any nation in the world, averaging three hours and 34 minutes a day, adds Forbes.
Of the 149 million internet users, 139 million are mobile. Nearly 70% of the adult population has smartphones. They download over 7.3 billion apps in 2018, ranking fourth in the world.
Fifth in smartphone usage
Brazil ranks fifth in the world when it comes to smartphone usage. But went it comes to accessing the internet with a mobile device, Brazil is second only to the Philippines. Some 84 million Brazilian adults own a smartphone.
And because various family members have access to one mobile phone, of the total 149 million internet users across the nation, 139 million use smartphones, according to Forbes.
When it comes to shopping online, Brazil ranks fourth in the world. Eighty-one percent of mobile owners access their bank via a smartphone and mobile banking app downloads increased by over 100%, which is second only to India.
Apart from coffee growers planning to use cryptocurrency in Brazil, no other crypto project except for Electroneum have decided to expand to the country with a ground-breaking, real-world use case by kicking off mainstream adoption of crypto across the country by enabling tens of thousands of ETN mobile phone users to top up Claro.