Cryptocurrency is continuing to witness an epic climb in global financial markets. Not only are average everyday people investing but scores of companies are also dedicating part of their portfolio to it.
All of this is fueling a crypto immersion in cities and countries in this world. One of them is Rio de Janeiro, a famous seaside city in Brazil that hopes to become a part of a growing number of cities that invest in cryptocurrencies. With this move they are also planning to allow their citizens to pay taxes with BTC at a discount.
This news was delivered by none other than the city's mayor, Eduardo Paes, at the Rio Innovation Week. The mayor's noted that he plans to allocate 1% of Rio de Janeiro's treasury reserves to bitcoin as a part of what is being coined Crypto Rio.
Paes in fact met with Francis Suarez, mayor of Miami, at Rio Innovation Week. It was there where they discussed how to attract more financial innovation to the city.
The news was hailed right away by the Secretary of Finance of Rio de Janeiro, Pedro Paulo who said that the city also plans to give discounts for tax payments made with bitcoin.
Currently, there is a 7% one-time fee discount in the city. Moving forward, for those who elect to pay it in bitcoin, the discount would be 10%. Yet, Paulo acknowledges the administration has to study the legal framework first.
Paulo and Paes are not the only ones working in favor of crypto in Rio. Chicão Bulhões, Secretary of Economic Development and Innovation, is another who joins the adoption fight. Bulhões was in charge of planning part of the roadmap for Rio's future. Between these three, the transformation of Rio de Janeiro into a technological hub for the growing crypto industry is a matter of time.
Bulhões acknowledges that there are many crypto companies currently in Rio. The vast majority of these are located in Leblon and Ipanema, two of Rio's most luxurious neighborhoods.
And in a reassuring note, Bulhões says that they already have tax incentives approved
Despite their highly volatile nature, cryptocurrencies seem to be growing in popularity. This is certainly true in Latin America where it has been well received by the people. Sure, it is quite normal in these parts to find places that accept BTC as a payment method. But, there is still a very large segment of the populous that is not very happy with the implementation of crypto in their day-to-day life.
Undoubtedly another big factor that plays into this — Crypto users whether in Latin America or anywhere else are not particularly keen on the idea of letting go of their holdings, even for a tax discount.
Some of this displeasure, in fact, is now appearing on social media. One user on Twitter added that paying taxes with bitcoin for a 10% discount is idiotic. He also reminded readers of his Twitter feed that the Brazilian Real lost 10% of its value last year. With this, he urged the public to always pay in fiat so that they can keep holding their BTC.
Nevertheless, Latin American cities like Rio have always had reasons to adopt cryptocurrencies as their financial systems are often archaic. So some of this innovation has been long overdue. Also, much of the Latin American population struggles with inflation. So crypto, while volatile, has allowed many to maintain their economic purchasing power.
The BTC ETF launched last year is arguably the biggest indication that Brazil wants to be a big player for crypto in Latin America. Only time will tell with this latest move in Rio.
