Rio de Janeiro ‘Crypto Hub’ Plans Sound All Too Familiar

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  • Two politicians want Rio de Janeiro to become a ‘crypto hub’
  • Chicão Bulhões and Pedro Paulo made the claim during Rio Innovation Week recently

    Several ‘crypto hubs’ have come and (quickly) gone in the past few years

Two Rio de Janeiro politicians last week uttered the prophetic words that have been proudly proclaimed in cities from Ohio to Estonia – they want to turn the city into a crypto hub. Cue the groans. The claim was made during Rio Innovation Week, during which Rio de Janeiro mayor Eduardo Paes also announced plans to invest some of the city’s treasury into cryptocurrencies, which naturally garnered more attention. However, before Rio goes rolling out the red carpet it should look at the fate of the other crypto hubs and see if the stress is really worth the reward.

Brazil’s Cryptocurrency Love Affair Flourished in 2021

Brazil turned to cryptocurrencies in a big way last year, mainly to stave off a devaluing sovereign currency, and as a result now has some 10 million active participants. The Brazilian Stock Exchange has Bitcoin and Ethereum-linked ETFs, with five already listed on B3, and clearly there is an appetite for more.

As a result, Mayor Paes last week to invest 1% of the city’s Treasury in cryptocurrencies, in the same way that Miami Mayor Franciz Suarez has promised to do. Suarez, not coincidentally, was on the same panel as Paes when he made his announcement.

Rio Crypto Hub Plotters Should Heed History

Brazilian outlet O Globo, which reported on the event, also reported that Pedro Paulo, Rio’s secretary for farming and planning, and Chicão Bulhões, secretary of economic development and innovation, want to transform the city into a crypto hub. Bulhões reportedly said of the plans:

These companies are in the region of Leblon and Ipanema, and we want to decentralize as much as possible. We already have tax incentives approved, we already have a percentage of 2%, which we want to focus a lot on the Porto region for the arrival of these new actors as well.

Before they make too many plans, Bulhões and Paulo should look at what has happened to other much vaunted blockchain hubs – Malta has suffered cripplingly ill-suited regulations which have all but killed crypto innovation, Estonia helped crypto companies launder money by handing out licenses like candy, and Ohio real estate developers ditched their ‘blockchain hub’ plans over a lack of interest.
Let’s hope the crypto hub curse doesn’t strike Rio, too.