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Import of Bitcoin worsens negative balance in Brazil’s financial balance
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The net balance of imports of Bitcoin and cryptoassets in Brazil reached US$14 billion between January and October 2024.
According to the Central Bank, this amount contributed significantly to the historic record of US$56.2 billion in net dollar outflows in the period, the highest recorded since the beginning of the historical series, in 1982.
Cryptoactives, led by Bitcoin, generated significant figures in the country. While the imports totaled US$ 15 billiona growth of 57.9% compared to the same period in 2023, the exports totaled just US$ 949 million.
The financial balance reflects a challenging scenarioin which the increase in investment in cryptocurrencies intensifies the flow of capital out of Brazil.
The change in the methodology for accounting for cryptoassets by the Central Bank also impacted the numbers. In July, Brazil adopted rules from the International Monetary Fund (IMF), reclassifying cryptoassets as “non-produced non-financial assets”. In this way, imports of these assets are no longer part of the trade balance, going to the capital account.
This change excludes crypto assets from current transactionswhich recorded a deficit of US$37.7 billion in the same period. Despite this, cryptoactives continue to put pressure on the country’s financial balance, according to Fernando Rocha, head of the BC’s statistics department.
He highlighted the reduction in the inflow of foreign capital, which fell from R$54.8 billion in 2023 to R$31 billion this year.
Andrea Damico, chief economist at Armor Capital, pointed to the acceleration in the remittance of profits and dividends, in addition to the increase in the volume of investments in cryptocurrencies, as structural factors for the negative balance of the financial account.
“The investment dynamics are favoring the outflow of resources from the country this year. At the moment, I see no prospect of reversing this behavior”, he stated.
Despite the record negative balance in the financial account, the trade surplus remains positive, with emphasis on the US$3.4 billion recorded in October.
Import of Bitcoin worsens negative balance in Brazil’s financial balance
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Import of Bitcoin worsens negative balance in Brazil’s financial balance
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Import of Bitcoin worsens negative balance in Brazil’s financial balance
