Brazil’s Biggest Bank Unleashes Crypto: Offers Bitcoin and Ethereum Trading to Millions

Itaú Unibanco, the largest private bank in Brazil, has launched its crypto trading service to provide its clients with additional trading options, as reported by Reuters on December 4,

Guto Antunes, Head of Digital Assets at Itaú, said that Bitcoin and Ethereum will be the initial offerings. The bank also plans to add more crypto assets in the future in compliance with the country’s regulatory requirements.

Keypoints

• Itaú Unibanco, Brazil’s largest private bank, has launched a crypto trading service for Bitcoin and Ethereum. More assets may be added later.
• As a custodian, Itaú will hold and safekeep customers’ crypto assets. Customers can’t yet deposit/withdraw to external wallets.
• Itaú has partnered with other major Brazilian banks on a central bank digital currency initiative called Drex.
• Crypto adoption is surging across Latin America, with Brazil as a top global crypto market. This is attracting companies like OKX to expand locally.
• Banks globally are exploring tokenization to improve efficiencies. JPMorgan’s JPM Coin processes $1 billion in bank transactions daily, with expectations to reach $10 billion soon.

Brazil Is A Massive Crypto Market

As a custodian agency, Itaú Unibanco provides the holding and safekeeping of customers’ crypto assets, in addition to offering exposures to crypto trading. Antunes alternatively noted that customers can’t deposit and withdraw assets to an external wallet at the initial phase.

“The most important thing is that when you keep your money in the bank account, you will have the guarantee of Itau’s balance sheet as security for the amounts invested,” Antunes added.

Itaú Unibanco has reportedly joined forces with other major institutions like BTG Pactual and Santander Brasil, to facilitate the national digital currency initiative Drex. Established in 2020 and officially launched in 2023, Drex is Brazilian central bank’s project to explore the feasibility of central bank digital currency (CBCD).

Other banks in Brazil like BTG Pactual and Nubank previously introduced their trading platforms that allow customers to diversify their portfolio. Nubank now offers 14 crypto options on its Nubank Cripto platform. The bank had also issued its own token Nucoin to foster loyalty programs and streamline client’s access to digital assets.

Like Nubank, BTG Pactual launched its crypto trading platform Mynt in late 2022. The bank initially focuses on Bitcoin and Ethereum with future plans to release additional options for customers.

Crypto adoption is one of the largest trends in Latin America, with Brazil leading the wave. As a top global crypto market, the country has attracted a number of industry figures to expand their local operations, including OKX.

In November, the crypto firm announced the launch of its crypto exchange integrated with Web3 wallet with exclusive focus on the Brazilian market. There may be more developments coming from the market.

Banks Gear Toward Tokenization

Tokenization has become a hot trend among financial and banking institutions. Tokenization can streamline various financial processes, such as payments, settlements, and trade finance.

Banks can potentially reduce the need for intermediaries, minimize transaction times, and enhance overall operational efficiency. The transparency of blockchain technology also contributes to reducing fraud and errors.

JPMorgan announced last week its bank-backed token JPM Coin would be ready for interbank transactions. The blockchain token recently debuted on Partior, a multi-bank system backed by JPMorgan, DBS Bank, Temasek and Standard Chartered. Partior aims to enable quick multi-currency transactions across its members.

Although the Singapore-based project is already operational, details about its inner workings and usage numbers remain unclear. According to Ledger Insights, DBS Bank is active on the platform, but other banks have yet to adopt it.

JPMorgan secured a major position, surpassing other US-based banks that still need permission to deploy this solution. This came after the bank received a no-objection letter from the US Office of the Comptroller of the Currency for Partior’s use case in May.

The inclusion of JPM Coin in Partior could potentially boost usage, given the scale and significance of JPMorgan’s blockchain token, which has a near-ubiquitous presence in banking markets. In October, Takis Georgakopoulos, JPMorgan’s Global Head of Payments, announced that the token was facilitating transactions worth $1 billion per day.

In November, Umar Farooq, JPMorgan’s Head of Global Financial Institutions Payments, expressed expectations of these numbers soaring. He claimed that the network could achieve $10 billion in daily transactions within the next year or two.