While the global crypto winter has dampened enthusiasm elsewhere, Latin America is witnessing a surge in interest, particularly in Brazil, where over 4 million individuals have embraced the crypto space. This has prompted traditional financial giants to enter the segment, with Itau, the largest private bank in Brazil and Latin America, becoming the first among its peers to offer crypto trading services.
Financial technology firms and established banks are recognising the potential of the crypto business in Latin America, tapping into a sought-after market and a lucrative source of fee income. Itau’s move is particularly noteworthy, marking a significant step for traditional banks venturing into the crypto landscape.
Ignacio Carballo, head of Alternative Finance at Americas Market Intelligence, notes that the purchase and sale of crypto assets, along with the associated commissions, represent the most profitable products in the crypto space for companies.
In a bid to compete with nimble challenger banks, Itau, with nearly 100 million customers in Brazil, is strategically expanding its offerings to include digital assets. Nubank and Mercado Pago, major neobanks, had already entered the crypto space in 2022, experiencing rapid success and highlighting the substantial demand for stablecoins and crypto in Brazil and Latin America.
Itau’s cautious approach involves a gradual introduction of crypto trading for a select group of customers, with the speed of expansion dependent on regulatory certainty. The Brazilian crypto market, which surpassed 4 million individual investors in July, awaits comprehensive regulations, with a framework for Crypto Assets approved at the end of 2022.
While major players like Nubank and Mercado Pago have thrived in the crypto space, some digital lenders in Brazil have decided to sunset their crypto services. Itau’s foray into crypto trading signals a pivotal moment in the region’s financial landscape, showcasing the convergence between the traditional and crypto economies.