Mercado Bitcoin, the largest digital currency exchange in Brazil, has confirmed the receipt of a payment provider license allowing it to offer users a wide range of financial services.
The Brazilian central bank issued the license to Mercado Bitcoin after nearly two years of regulatory back and forth with regulators. The new permit will see Mercado Bitcoin rely on its MB Pay arm to offer a swathe of digital banking solutions, including custody and investment options.
“The approval of the Central Bank is a crucial step, as it allows us to continue expanding our business and providing a better service to our customers,” said Roberto Dagnoni, CEO of 2TM Group, Mercado Bitcoin’s parent company.
Armed with a new license, MB Pay is set to issue a debit card to facilitate digital currency off-ramp transactions in the coming months. Furthermore, users with no digital asset holdings may be allowed to invest in digital fixed-income investments on the platform.
Mercado Bitcoin currently has over 3.7 million customers, with experts predicting a seamless transition to traditional fintech, given its successes with digital currency. In 2021, the firm threw its hat in the ring to expand its offerings, but a lack of regulatory clarity and trouble with regulators scuttled the objectives.
Mercado Bitcoin’s trouble with regulators was underscored by the fact that the new license was received on the same day when the firm was ordered to pay back over 2,180 BTC in connection to a 2013 fabricated hack. The exchange revealed that it would appeal the court’s decision, setting the stage for another lengthy legal battle.
In a bid to ensure its seamless transition into the broader fintech space, Mercado Bitcoin inked a partnership deal with local broker Guide Investimentos.
Several global digital currency exchanges in Brazil are taking steps to expand their offerings, including Crypto.com and Bitso. On May 19, the local partner of Binance, Latam Gateway, received a payment provider license from the central bank.
The allure of Brazil
With a population of over 214 million and a growing digital currency ecosystem, global digital asset service providers have identified Brazil as the next frontier. Chainalysis’ 2022 Global Crypto Adoption Index ranked Brazil in 7th place, spurred by receptive legislation and the reliance on U.S.-backed stablecoins to preserve wealth.
Over 12,000 corporate entities in Brazil have digital assets on their balance sheet, with over 1.3 million individuals with digital currency holding more than $2 billion.
In December 2022, former Brazilian President Jair Bolsonaro signed a bill into law criminalizing digital asset fraud and establishing a new licensing regime for service providers.
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