Fidelity: Rio de Janeiro Crypto Adoption is Only the Beginning

Rio De Janeiro is putting crypto on its balance sheet, and it won’t be long before other governments get FOMO, Fidelity researchers said

article-image

Rio de Janeiro. Source: Shutterstock

share

key takeaways

  • Rio de Janeiro Mayor Eduardo Paes said the Brazilian city will put 1% of its treasury into crypto
  • The announcement is in line with Fidelity Digital Asset researchers’ predictions

Brazil’s second-largest city is allocating 1% of its treasury to cryptocurrencies, Rio de Janeiro mayor Eduardo Paes said Friday. 

The announcement confirms a 2022 prediction from Fidelity Digital Asset researchers: that more governments and central banks will acquire digital assets. It comes down to keeping up appearances and staying on top of new innovations, they said. 

“We also think there is very high stakes game theory at play here, whereby if bitcoin adoption increases, the countries that secure some bitcoin today will be better off competitively than their peers,” Fidelity Digital Asset researchers wrote in a report published on Jan. 6, 2022. 

Other cities and sovereign states are going to have to start thinking ahead if they want to maintain an edge, even if the value proposition of cryptocurrencies is not immediately clear, researchers said. 

“While Rio de Janeiro is a city, and technically the mayor mentioned cryptocurrency, not bitcoin specifically, we see the overall game theory as the same,” said Chris Kuiper, head of research at Fidelity Digital Assets. “In other words, entities are viewing bitcoin acquisition now as a small insurance premium to pay.” 

Paes also mentioned plans to offer citizens who pay property taxes (known in Brazil as IPTU) in bitcoins a discount, according to a report from the Brazilian newspaper O Globo

Long-time cryptocurrency fan Miami Mayor Francis Suarez also spoke at the Rio Innovation Week summit where Paes made the announcement. Suarez is looking to allocate a portion of Miami’s treasury to digital assets, he said last year. 


Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

Mon - Wed, March 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience: Attend expert-led panel discussions and fireside chats Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts.

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Research report - cover graphics (1).jpg

Research

In this report, we dive into crypto private market data to gather insights on where the future of the industry is headed. Despite a notable downturn in private raises, capital continues to infuse promising projects that aim to transform payments, banking, consumer experiences, community, and more, with 2023 being the fourth-largest year for crypto venture capital.

article-image

The results mark “a major positive inflection point,” one analyst says, as the exchange carries net income momentum into a crypto rally

article-image

While the slate of 10 US spot bitcoin funds have tallied $4.6 billion of net inflows thus far, half of the field is lagging the leaders

article-image

Trading volumes totalled $154 billion in Q4, including $125 billion in institutional volume

article-image

DeFi on Bitcoin is all the rage right now and Stacks is positioned to benefit

article-image

The Boston Globe reports that lawyer John Deaton is weighing a possible bid

article-image

Ethereum’s Dencun upgrade will enable Uniswap v4 to optimize smart contracts for complex functionality