How to Buy Bitcoin in Brazil: Complete Cryptocurrency Guide

Is Bitcoin Legal in Brazil?

Of course, one of the first things people ask when they hear about Bitcoin in Brazil for the first time is whether or not it is legal. The reality is that the laws and regulations around cryptocurrency are different in every country. The good news is that Brazil is not one of the countries that have decided to take a negative stance on the cryptocurrency revolution.

The Central Bank has warned against the use of bitcoin in Brazil for speculative purposes on a couple of occasions. The reality, however, is that central bankers don’t have the best reputations throughout South America.

High levels of inflation are common throughout the region, and the prevalence of smartphones among the population makes cryptocurrency an interesting proposition. Brazil has consistently ranked among the top countries for cryptocurrency adoption, with some studies placing it second globally behind Turkey. This high ranking reflects a strong interest in Bitcoin in Brazil.

Although there are no regulations specifically around Bitcoin in Brazil, the reality is that anyone is currently free to use it for any purpose if they wish. The only noteworthy statements regarding Bitcoin that have come out of the government in Brazil have come from the Banco Central do Brasil.

This central bank took the approach of many other central banks around the world by simply warning its citizens that there are risks when it comes to Bitcoin and cryptocurrency. The way crypto works is completely different from the traditional financial system, so it’s not a bad thing that the central bank decided to simply educate the population about things like price volatility and taking full custody over one’s digital assets.

That said, the central bank has also gone as far as to discourage the use of bitcoin in Brazil due to the perceived risks it sees with the cryptocurrency ecosystem. However, the fact that Bitcoin is simply unregulated and not outright banned should be viewed as a positive for now.

How to Buy Bitcoin in Brazil

Although Bitcoin is not regulated in Brazil, there are still a number of different ways to access the cryptocurrency ecosystem via local, international, and peer-to-peer (P2P) exchanges.

In terms of local exchanges available in Brazil, three of the most well-known names in the business are Mercado Bitcoin, Bitso, and Foxbit. Local exchanges are usually the best option if you are new to Bitcoin because they can do a lot more hand holding than the global exchanges.

Domestic exchanges tend to be more plugged into the local financial infrastructure, which means it will be much easier to gets funds on and off the exchange in a timely fashion.

Anyone who needs access to large levels of liquidity or more powerful trading engines will probably want to opt for one of the best global exchanges, like Binance or Kraken. Binance is also the best option if you’re looking to trade a large amount of different niche crypto assets, as they have thousands of different trading pairs listed on their platform.

P2P exchanges are also a solid option for people who do not have access to a bank account or want to retain a certain level of privacy and anonymity with their Bitcoin activities.

Paxful and LocalBitcoins are two well-known P2P exchanges that are available in Brazil, but there is also a local option known as AirTM. A unique feature of AirTM is that it enables people to hold U.S. dollars in their accounts, although it should be noted that Paxful recently integrated the Tether stablecoin into its platform as well.

One final option for purchasing Bitcoin in Brazil that should be mentioned is the Bitcoin ATM. There are three Bitcoin ATMs in Sao Paulo and one in Rio de Janeiro. This option tends to come with much higher fees than any of the other options, but they’re also the best bet if you need to move in or out of crypto quickly in some situation.

What is the Best Cryptocurrency Exchange in Brazil?

Although many of the early bitcoin exchanges were focused on the United States, Europe, and China, there are now a number of exchanges available that are focused on the South American market, including Brazil.

In terms of trading volume, the most popular exchange in Brazil right now is Mercado Bitcoin. In fact, this is the largest exchange in all of South America. Most people who hold Bitcoin in Brazil will find that this exchange is the best option because it enables users to get funds on the platform via both cash deposits and bank transfers. Additionally, there is no user verification required in order to get funds onto the exchange via a cash deposit.

You will also be able to trade directly between Brazilian Real and Bitcoin rather than having to first convert your real to U.S. dollars. Of course, much of the global trading volume is denominated in dollars, so you will still need to look for another option if you want to make large trades. Bitso and Foxbit are two other well-respected crypto exchanges that cater to the Brazilian market, so you may also want to look into those options before making a final decision on your exchange of choice.

Banks in Brazil Don’t Like Bitcoin

One thing to keep in mind when you’re trying to move between fiat currency and Bitcoin in Brazil is that some of the banks really don’t like cryptocurrency. Multiple banks have shut down the accounts of businesses that are associated with Bitcoin, which is part of the reason why P2P trading is rather popular in this country.

Bradesco, which is one of the largest banks in Brazil, even closed the personal bank accounts of the owners of an exchange called Bitblue back in 2018.

When you combine these bank account closures with the multiple warnings the central bank has given against bitcoin and other cryptocurrencies, it becomes clear that it may be a good idea not be too loud about your involvement in the Brazilian cryptocurrency community.

This is also a good general rule of thumb in any country that has a history of high levels of inflation or unsustainable, debt-powered spending, as cryptocurrency users could eventually become scapegoats for local politicians.