The rise in popularity of dollar-backed stablecoins as a means of transferring money abroad is increasing the volatility of Brazilian capital flows, the deputy governor of Brazil's Central Bank stated on Tuesday.
The use of crypto assets by Brazilians has surged in the last two to three years, with around 90% of the flow linked to stablecoins - digital money pegged to leading currencies like the US dollar - according to estimates from its central bank.
Deputy Governor Renato Gomes stated that one of the "concerning" issues is that they can be a way to circumvent normal controls for converting Brazilian reais into dollars and transferring them in and out of the country.
"They offer an escape route," Gomes said at a conference in London organized by the monetary policy think tank OMFIF. "You can get stablecoins, and when you arrive in the United States or anywhere else, you can cash out the stablecoin and essentially use a dollar account without all the usual regulation."
It is a "very used" route for remittances, he added. A direct example is that some traditional ATMs in parts of the United States now allow withdrawals of dollars from some stablecoin wallets.
"Capital flows become more volatile," Gomes said, "essentially because almost anyone can use stablecoins to send money in and out of the country."#BinanceAlphaAlert #MastercardStablecoinCards #BinancePizza #MastercardStablecoinCards
