Brazil's Biggest Brokerage Begrudgingly Joins Crypto Market
(Bloomberg) -- Brazil’s biggest independent brokerage is officially joining the crypto craze -- even if it preferred not to.
Grupo XP, the owner of XP Investimentos SA, is launching an exchange for Bitcoin and Ethereum trading in the coming months, Chief Executive Officer Guilherme Benchimol said at an event in Sao Paulo. Around 3 million Brazilians have exposure to Bitcoin, compared to only around 600,000 that invest in stocks, according to him, pushing the firm to venture into the business.
"I must confess, this is a theme I’d rather didn’t exist, but it does," Benchimol said. "We felt obligated to start advancing in this market."
The exchange, which will be set apart from XP’s other brokerage businesses, is going to be run by Thiago Maffra. It will be called XDEX and have around 40 employees.
This week, Brazilian regulators released a set of rules that allow funds to invest in crypto-assets abroad, with some limitations. In the past, Brazil’s central bank chief Ilan Goldfajn has compared cryptocurrencies to a Ponzi scheme and a bubble.
XP is aiming to have 1 trillion reais ($245 billion) under custody by 2020, four times what it expects to have by year-end. The brokerage is also launching a bank in the next few months, Benchimol said.
The firm expanded rapidly over the past few years by offering on-line investment platforms to Brazil’s growing middle class. Banking giant Itau Unibanco Holding SA agreed to buy a minority stake in the company last year, a deal that valued it at 12 billion reais.
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