December 4, 2023 at 18:10 GMTModified date: December 4, 2023 at 18:10 GMT
December 4, 2023 at 18:10 GMT

Brazil’s largest bank commences crypto trading services

Itau Unibanco, which is Brazil’s largest bank, has launched a cryptocurrency trading service on its investment platform.

Brazil’s largest bank commences crypto trading services

Itau Unibanco, which is Brazil’s largest bank, has launched a cryptocurrency trading service on its investment platform. It seeks to facilitate the trading of the top two cryptocurrencies by market capitalisation, Bitcoin ($BTC) and Ethereum ($ETH).

The move will place Itau directly in competition with other leading crypto exchanges which have already launched similar services in the country. This includes MB and investment bank BTG Pactual’s digital assets unit Mynt, as well as global behemoths like Binance.

However, unlike them, Itau will also store crypto assets for its clients. In doing so, it will act as a custodian for the trading service, safeguarding users’ assets.

“It starts with Bitcoin, but our overarching strategic plan is to expand to other crypto assets in the future”, said the Head of Digital Assets, Guto Antunes, revealing the bank’s plans to incorporate other cryptocurrencies in future.

Antunes also noted how initially, Itaú clients would not be able to deposit and withdraw cryptocurrency using external crypto wallets. Adding on, he said: “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”.

Gaining much ground in Brazil

The recent development comes ahead of the country’s planned nationwide rollout of its central bank digital currency (CBDC) called the Drex. The CBDC, previously referred to as the “digital real”, was given an official brand name and logo in August. 

September saw a significant surge in crypto adoption in the country, where the imports of crypto rose by 44.2% from January to August 2023 when compared with 2022. 

In response to this, various leading lenders in Brazil like BTG Pactual and Santander Brasil reportedly started ramping up headcount and adding resources to prepare for the country’s CBDC. 

According to reports, Itaú also launched a digital asset custody earlier this year. As disclosed by Antunes, about 85% of its clients were interested in keeping their crypto with the bank. 

On the other hand, few local players departed from the crypto market recently. This includes brokerage and investment company, XP Investimentos, and  financial services firm, PicPay. While the former did not reveal reasons for the shutdown of its crypto services, the latter, owned by conglomerate J&F, reportedly cited regulatory uncertainties. 

A worldwide trend

Brazil is not the only country where banks have been taking interest in the crypto sector. Numerous other lenders worldwide have shown interest, like HSBC Holdings, which integrated blockchain technology into its operations last month.

Back in June, Hong Kong’s largest bank HSBC gave its customers the ability to purchase and sell Bitcoin and Ethereum ETFs on the Hong Kong exchange. This marked a significant milestone in the industry as it opened a new avenue for retail and institutional investors to access cryptocurrencies within regulatory frameworks. 

In July, Societe Generale SA’s blockchain unit secured the first licence under France’s new cryptocurrency regulations. German cooperative lender, DZ Bank AG, also unveiled plans to launch a platform for the custody of digital assets.

More recently, Commerzbank AG became the first German full-service bank to bag a cryptocurrency custody licence in the country. Following this, the Frankfurt-headquartered bank was able to build up a broad range of digital asset services, with particular emphasis on crypto assets.

Germany’s biggest lender, Deutsche Bank, also revealed its plans of offering digital asset custody and tokenisation services in the country. It has already started working with Taurus, a Swiss start-up specialising in cryptocurrency safekeeping, for the same. 

The trend has extended to leading American financial institutions as well, like JPMorgan Chase & Co which has now incorporated blockchain technologies in its banking services, enabling companies to execute their transactions instantly.