Emerging economies like Brazil and India are moving closer to cryptocurrency with their most recent action. Brazil approved the use of cryptocurrencies as a form of payment, whereas India is testing the retail use of its digital currency.
KEY LESSONS
- Brazil approved the use of cryptocurrencies as money.
- The central bank of India is putting its digital money to the test in various places.
- In emerging economies, digital currencies may help to maintain financial stability.
Brazil makes cryptocurrency legal
Brazil's federal legislative body, the Chamber of Deputies, approved the use of cryptocurrencies as a form of payment throughout the entire nation, promoting the uptake of virtual money and the development of the ecosystem.
No cryptocurrency is made legal tender in the nation under this bill. However, the description of payment methods covered by central bank supervision in the bill will also include digital currencies and mileage programs. Latin America currently has the most cryptocurrency ETFs in Brazil. The majority of banks and brokers in the nation provide cryptocurrency investments as well as related services including custody and token offerings.
India tests the electronic rupee
In four cities—Mumbai, New Delhi, Bengaluru, and Bhubaneswar—the Indian central bank will begin testing the digital rupee, the retail central bank digital currency (CBDC). Four banks will take part in the initial digital currency experiment, with four more sets joining later, according to the Reserve Bank of India. The same denominations that paper money and coins are currently printed would be used to issue digital money.
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The central bank stated that the e-rupee would have the same properties as actual cash, such as trust, safety, and final settlement, and that it would not bear interest and be convertible into other types of currency, such as bank savings. Banks will disperse e-rupees through mobile wallets.
The conclusion
As cryptocurrencies gain popularity in developing nations, policymakers continue to closely watch the sector to determine whether further regulation may be necessary. The most recent developments show that emerging economies are still incorporating cryptocurrency into society despite the crypto winter and the collapse of FTX in 2022.