Binance’s Brazilian Partner Gets Licensed to Operate as a Payment Institution
- The Brazilian partner of Binance, Latam Gateway, has been licensed to operate as a payment institution in the country.
- The two firms have been working together since June 2022, when Latam Gateway ended its partnership with Capitual.
- Brazil has become one of the most active crypto markets, with a 78% increase in crypto adoption in 2022.
- Binance and Mastercard recently launched a prepaid crypto card in the region, allowing up to 8% cashback.
The largest country in South America, Brazil, has received a number of applications from crypto companies about starting operations in the region and getting licensed to do so. One of these firms is the world’s largest crypto exchange, Binance, which continues its attempts to expand operations in the South American region. As per a recent turn of events, the leading exchange’s Brazilian partner, Latam Gateway, has been officially licensed to operate as a payment institution and electronic money issuer in the country.
As per local media reports, the Central Bank of Brazil has provided the license to the firm, which is based in Maringá, a municipality in southern Brazil founded in 1947. Binance and Latam Gateway have been working together since June last year, after the latter broke its ties to Banco Capitual, a multi-currency digital bank with the goal of making the usage of crypto easy for people in the region.
According to Binance, Brazil is one of its top global markets and, therefore, a strong priority. Meanwhile, the country has become one of the most active crypto markets, with cryptocurrency ownership increasing from 4.9% in 2020 to 7.8% in 2021. Although 2022 was marked by a slump in the digital asset space, the adoption rate in the country continued to grow, surging 78% year-over-year, as per the Statista Global Consumer Survey.
Behind India and China, Brazil comes in at number three when it comes to the number of active crypto holders in the country. The South American country had around 32.3 million crypto users at the end of 2022.
As reported earlier by Bitnation, Binance partnered with American multinational payment corporation Mastercard to launch a prepaid crypto card in January this year in Brazil, as the latter aims to “broaden the connection between traditional finance and crypto.” A similar prepaid crypto card was also introduced in Argentina and is currently in the testing phase in Brazil. These cards provide support to those who have been affected by the economically unstable conditions in South America.
Users will need to have a valid ID card to be eligible for the card, and the Binance prepaid crypto card will charge a 0.9% fee for each transaction involving cryptocurrencies. The card will also allow free ATM withdrawals and provide up to 8% in cashback with crypto.
While the leading crypto exchange’s plans to expand operations in Brazil are in full effect, it is important to note that Binance is being probed by the Federal Prosecutor’s Office and Federal Police in Brazil for allegedly assisting clients in avoiding a stop order on investments in crypto derivatives.
According to previous reports, the Brazilian Securities and Exchange Commission (SEC) imposed a stop order on derivatives offerings in 2020, but the agency has told the Attorney General of the State of São Paulo that Binance has broken its stop order and continued to provide access to derivatives to the citizens of the country.
This regulatory action comes at a time when the exchange, its co-founder and CEO Changpeng Zhao, also known as CZ in the crypto industry, and the top executives are being investigated by the authorities in the United States.