Ripple Expands in Brazil as Coinbase Pushes Back on Stablecoin Taxes

Brazilian financial market infrastructure firm CSD BR partnered with blockchain solution provider Ripple to use the XRP Ledger blockchain as an additional layer for recording and auditing financial assets, Ripple said in a Tuesday (Jan. 29) press release.

The project marks the first phase of a strategic partnership that brings together CSD BR’s regulated infrastructure and Ripple’s decentralized blockchain technology to advance asset tokenization in Brazil, according to the release.

By using the XRP Ledger as an additional layer for recording and auditing financial assets, while retaining CSD BR’s systems as the official source of record for registration, deposit and settlement of the assets, this first phase of the project will allow the companies to assess the gains in transparency, traceability, automation and efficiency delivered by blockchain technology, per the release.

Once this phase is validated, CSD BR and Ripple plan to gradually expand blockchain use to native asset issuance and to trading among authorized participants. The companies will also consider expanding this model beyond Brazil to other international markets, according to the release.

Daniel Polano Spreafico, head of products and clients at CSD BR, said in the release: “The goal is to evaluate how the technology performs under real operating conditions and build a solid foundation for future developments.”

Silvio Pegado, managing director of Ripple for Latin America, said in the release: “Moving beyond pilots and proofs of concept to a live record-keeping infrastructure in a national capital market is a major milestone for the industry.”

In a separate development, cryptocurrency platform Coinbase published a blog post Wednesday (Sept. 30) calling on Brazilian policymakers to help build a regulatory framework that will support the development of a stablecoin market with global interoperability.

Fabrio Plein, senior regional managing director, Americas at Coinbase, said in the post that Brazilian regulators are considering reclassifying stablecoins as electronic money or foreign currency, which could lead to taxation on crypto transactions. Plein also said that October will see general elections in Brazil as well as a deadline for virtual asset service providers (VASPs) to file license applications.

“The future of finance is being built on open, always-on networks where people can hold, move and exchange value at the speed of the internet,” Plein said in the post. “For Brazilians, that means more direct access to global markets, new ways to save and build wealth, and financial services that can reach people underserved by traditional markets. Brazil can help shape that future or write rules that leave its citizens and currency on the sidelines.”

It was reported in March that Brazil’s finance minister was postponing new rules on crypto taxation as well as several other controversial tax measures to avoid losing legal capital in Congress ahead of an upcoming presidential election.