Tether Operations Limited, the issuer of USDT – the largest stablecoin by market cap, announced that its main product is going to be available in over 24,000 ATMs in Brazil starting November 3. This is made possible by SmartPay, a local crypto company.[i]
Users will have the ability to send USDT (Tether) from any crypto wallet to an ATM and convert it to Brazilian Reals, the local currency. There is also a plan to allow users to deposit Brazilian Reals at ATMs and receive USDT in their wallets by February. This is all through SmartPay, which is partnered with TecBan – a local company that operates ATMs under the name Banco24Horas.[ii]
Paolo Ardoino, Tether’s Chief Technology Officer said: “Adding tether tokens to ATMs across Brazil provides the opportunity to include more people in the financial system. This will bring major changes not only to the payments industry but to the entire Brazilian financial ecosystem.”
Brazil has a large number of unbanked adults. According to a study by Instituto Locomotiva, 34 million Brazilians have no bank accounts or do not use them frequently. This new development may be able to present an opportunity for a large part of the population to be included in the financial system.
Why are Stablecoins Popular in Brazil?
According to a feature by Coindesk, the Brazilian stablecoin boom goes back to at least 2020, when crypto exchanges started to notice the rising number of stablecoin traders in the country. Factors like rising inflation and the continuous depreciation of the Brazilian Real against the US dollar are seen as the reasons. Converting to stablecoins instead of USD in fiat form will also let locals avoid taxes associated with acquiring foreign currencies.
To combat the Reals depreciation and inflation, converting the local currency to the US dollar (USD) seemed to be a logical choice. Stablecoins allow Brazilians to have an asset that is pegged to the USD without actually holding the actual currency.
Benefits for Brazilians
The pandemic has exposed a lot of weaknesses and inadequacies in the traditional financial system. Fear of catching the virus made digitization and online banking a necessity. But not everybody has access to these modern conveniences. There is still a big portion of the world population who are not included in the banking system. Cryptocurrency changed all of this.
Instead of going to the bank with all the necessary documents, a customer can simply use a smartphone to register for a crypto wallet. We have to consider that not everybody lives near a bank. Some need to travel far to open a bank account that needs a minimum amount to be deposited. With crypto, the smartphone becomes the bank that does not have any minimum maintaining balance.
The option to convert USDT to Fiat and vice versa via ATM will usher in a new wave of interest in cryptocurrency in Brazil. It will help everybody, especially the unbanked, to have access to mainstream financial conveniences like digital banking and online payments. This will give a new meaning to financial equality. This is what crypto is all about.
[i] https://tether.to/en/tether-usdt-available-in-over-24000-atms-across-brazil-on-3-november
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