The move could considerably impact Binance's footprint in Brazil.
Crypto exchange Binance's payment partner in Brazil, Latam Gateway, has secured the central bank's approval to function as a payment institution and electronic money issuer.
The news was revealed by the local news portal Tilt on May 19th.
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Latam Gateway is a vital bridge for overseas firms operating in Brazil by offering on/off-ramps for the Brazilian real. Binance remains its sole crypto client within the country, while other major clients are primarily from the gaming industry, including Codashop, Moedaz, and Game Hollywood.
Brazil, with its population nearing 214 million, has become a promising destination for cryptocurrency businesses.
To give you a hint of the dynamics, Binance, in collaboration with Mastercard, unveiled a prepaid crypto card earlier this year. The card facilitates Brazilians to pay bills and make purchases using more than 14 crypto assets, thanks to real-time crypto-fiat conversion.
Coinbase, another crypto giant, is not far behind in broadening its footprint in Brazil. Since March, the crypto exchange has been teaming up with local payment providers to offer crypto purchases and facilitate deposits and withdrawals in the local currency.
Regulatory oversight in Brazil is keeping a close eye on cryptocurrency companies. Binance has been reportedly under investigation on suspicion of assisting clients in circumventing a prohibition on cryptocurrency derivatives investments.
In the context of regulatory action, in 2020, the Brazilian Securities and Exchange Commission imposed a stop order on cryptocurrency derivatives. Under local law, futures contracts are classified as securities, regardless of the nature of the underlying assets.
With the central bank's approval, Latam Gateway's operations gain added legitimacy, potentially solidifying Binance's presence in the Brazilian market. As more crypto firms set their sights on Brazil, the intersection of crypto and local regulatory frameworks is becoming increasingly pivotal.
