BeInCrypto spoke with Pedro Guerra, Chief of Staff of the Vice Presidency of the Republic and the Ministry of Development, Industry, Commerce and Services of Brazil (MDIC).
Guerra, a recognized advocate of Bitcoin, stated that corporate adoption of Bitcoin is an irreversible path in Brazil. The Chief of Staff of the Vice Presidency predicts that stablecoins will dominate the regulatory agenda in the coming years and believes that Brazil is experiencing a new paradigm: the government is still learning how to manage Bitcoin.
Among other topics, Pedro stated that, for the moment, the federal government has no plans to create a Strategic Reserve of Bitcoin.
The government is learning to deal with cryptocurrencies
BeInCrypto: Pedro, from the perspective of Brazilian regulations: Federal Revenue, CVM, and the Central Bank, how is the federal government handling companies that are starting to hold Bitcoin on their balance sheets? Are there any gaps? Are there any advances?
PEDRO GUERRA: I believe we are witnessing a gradual process of understanding the potential of crypto assets in the economy. It is still in a somewhat embryonic phase. On one hand, there are institutions that have advanced, such as the Securities and Exchange Commission (CVM), which approved Bitcoin ETFs in 2021, even before the United States. There have also been advances in the Federal Revenue Service regarding the declaration of crypto assets.
I have no doubts about the growing awareness of the relevance of crypto assets. But there are still many doubts. There is noise and distrust about its use for money laundering or other illegal activities. At the same time, traditional accounting legislations still have difficulties dealing with these assets. So, it is an ongoing process. Comparatively, I believe Brazil is well positioned.
There are contradictions here and there, especially on fiscal matters, but on the accounting issue, we are advanced.
Moment of 'putting the house in order'
BeInCrypto: The Declaration of Crypto Assets (DeCripto), for example, is based on the CARP, the international standard of the OECD adopted by more than 60 countries. This facilitates the exchange of information between Brazil and the rest of the world. Crime occurs with or without crypto. How is the government handling this internally to foster technology in the country?
PEDRO GUERRA: After a very open period — like during the expansion of fintechs — now there is a concern: Did we open too much? Is it time to be more cautious in regulating certain issues?
We are experiencing this moment of 'putting the house in order.'
BeInCrypto: Does this approach of 'putting the house in order' come with more concern or with more focus on economic innovation?
PEDRO GUERRA: There is an attempt to balance the two objectives. I always emphasize to the Central Bank (BC) and the Ministry of Finance that it is essential to consider the possible disincentives of very draconian requirements for the sector.
On the other hand, if the government does not have a clear stance, there will always be persistent doubts in society about the reliability of these institutions.
It is a very delicate balance. Measures that seem harmless can bring huge disincentives to the sector and fail to generate the expected benefits, such as banking decentralization, increased banking inclusion, reduced intermediation margins, or financial sovereignty.
We have very solid institutions — Federal Revenue, CVM, BC — all formed in another paradigm, all from the seventies, some even earlier. And they are all adapting. Today we are experiencing a new economic, regulatory, and social paradigm. The big question is: what should be the stance of these institutions? How should they cooperate? It is still a work in progress.
PEDRO GUERRA: I do not believe this will stop the sector. Brazil is very advanced in financial discussions and has internationally recognized institutions, not to mention the high exposure of the population to crypto assets.
But it is difficult to predict the exact terms of the debate. I have the impression that, in the public sector, the discussion will strongly focus on stablecoins. It is the crypto asset that interacts between fiduciary and digital assets.
Whether through technology developed by the Central Bank or strengthening the market, stablecoins are expected to dominate the agenda in the coming years, even more than Bitcoin. This does not harm Bitcoin; it simply makes the adoption process more gradual than we would like.
BeInCrypto: Is the Brazilian government attempting to form a strategic reserve of Bitcoin, even if small — 1%, 2%, 3%?
PEDRO GUERRA: I do not see this movement happening. There is still a lot of ignorance about what Bitcoin is — its potential as a reserve, as strong money, as an intergenerational asset, and even as a tool for geopolitical sovereignty.
I think it is very difficult for this to happen in the short term. But the debate itself is extremely positive. It brings the topic to the general public and within the government.
Bitcoin enthusiast experiences a path of no return
BeInCrypto: Brazil is already a leader in corporate adoption in Latin America. Should the country continue on this path?
PEDRO GUERRA: Yes. I believe it is a path of no return. Brazil will continue to be an important crypto market, especially among the new generations.
Young people are facing difficulties saving money, buying a house, or starting a family, problems that arise in the fiat world we have lived in since 1971. That is why I see a growing enthusiasm. I am very excited. Adoption could explode suddenly, but I consider it very unlikely that we will see setbacks.
The beginning was marked by ignorance and associations with crime or scams. The proliferation of memecoins also contributed to this 'caricaturization.' But as people study finance and money, they become more confident and rarely backtrack.
Demographics also play in favor: a digital generation that did not experience hyperinflation sees its purchasing power deteriorating and seeks alternatives. This drives adoption. Brazil has everything necessary to be a leader in the corporate adoption of Bitcoin in Latin America, Guerra concluded.
