Recent Cryptocurrency Developments in Latin America

Noteworthy advancements in the cryptocurrency sector this week have emerged from Argentina, Brazil, and El Salvador.

El Salvador is looking at a $100 million investment initiative aimed at tokenizing small and medium-sized businesses. Meanwhile, Brazil is contemplating legislation that would eliminate taxes on crypto and set up a strategic Bitcoin reserve. On the other hand, Argentina’s fintech landscape took a hit when lawmakers decided to withdraw a bill that would have allowed payroll payments to be made directly to digital wallets.

These developments reflect how Latin American governments and businesses are trying out fresh approaches to reserves, investment, and financial access, positioning the region as a key player in the evolving cryptocurrency policy landscape and innovation.

Challenges in Argentina’s Payroll Deposit Reform

A labor reform proposal that would have let employees receive their salaries in digital wallets was initially welcomed by Argentina’s fintech sector. However, lawmakers eventually dropped this provision, which many interpreted as a boost for traditional banks.

During discussions, President Javier Milei’s party opted to remove the provision to secure broader support for the law, even though polls indicate that a majority of Argentines favor the right to decide how their paychecks are deposited.

Legally, employees must be paid through conventional bank accounts. Still, the popularity of digital wallets has been rising, likely due to challenges with traditional financial services.

A 2022 survey by the central bank revealed that only 47% of Argentines possess a bank account. This reflects a long-standing skepticism towards banks, following events like the 2001 “Corralito” crisis, combined with persistent inflation and regular access limitations.

As a result, fintech platforms have increased access to financial services. Many users now rely on applications like Mercado Pago, Modo, Ualá, and Lemon as their main gateway to official digital finance.

Brazil’s Moves Toward Bitcoin Reserves and Tax Relief

A report presented to Brazil’s House of Representatives Economic Development Committee could pivot the country’s position on Bitcoin significantly.

This proposal includes eliminating taxes on cryptocurrency profits and establishing a Sovereign Strategic Bitcoin Reserve (known as RESBit).

Proposed by Rep. Luis Gaston, who is overseeing Bill 4,501/2024, the new text amends existing regulations covering the cryptocurrency sector, including adjustments to monitoring and reporting practices.

The plan permits the federal government to acquire Bitcoin long-term, capping purchases at 5% of the nation’s foreign currency reserves. The Ministry of Finance and the central bank will collaborate to manage these assets, securing them in cold wallets for additional protection.

Furthermore, the legislation would abolish current requirements for brokers and investors to track all crypto transactions and allow federal taxes to be paid in Bitcoin. This move positions Bitcoin as a potential strategic reserve to back Brazil’s digital currency, Drex, which also offers complete income tax exemption on profits from Bitcoin and other digital assets.

El Salvador’s Initiative for SMEs

Corporacion Infinito (COIN) and Stakiny have formed a strategic alliance to channel $100 million in foreign direct investment towards small and medium enterprises (SMEs) in El Salvador by 2026.

This venture aims to utilize regulated tokenized equity products to bridge local businesses with global finance, implementing a unified infrastructure that combines financial structuring, regulatory adherence, and blockchain technology.

According to Antonio Arue, COIN’s vice president, the project seeks to draw institutional investors and international funds looking to employ digital investment methods to aid the growth of Salvadoran businesses.

Stakiny acts as a platform that obtains authorization from the National Digital Assets Commission to tokenize shares of private companies, supplying the necessary technical framework.

This model links traditional shareholder agreements with blockchain-registered digital tokens, facilitating real-time management of ownership structure, dividend payouts, governance events, and secondary transactions.

To make tokenized investments accessible to both crypto-savvy and traditional investors, the platform operates on an EVM-compatible network and is designed for use with mobile wallets featuring biometric authentication.