BitcoinWhile the citizens of Brazil were rejoicing that finally, they will have an exchange that was local to them to trade on cryptocurrencies, XDEX has made an announcement that would bring down their happiness by a bit. As per the latest announcement, the crypto exchange wouldn’t allow users to send or receive BTC to their personal wallets and will only allow redemption in reais
XP Investimentos’ Crypto Exchange begins pre-registrations with warnings
The website of XDEX, the cryptocurrency exchange launched by Brazil’s biggest investment firm, XP Investimentos, is already up and accepting pre-registrations. It adds a few details on the crypto exchange, including that users won’t be able to send BTC to and from their personal wallets. According to the company, it has a built-in transfer recognition system connected to its banks, which “ensures speed and reliability when transferring real money to buy cryptocurrencies.” While it isn’t yet clear when the exchange will open for business, its page restates users will have to open an account when it does.
Notably, as the local news outlet points out, the crypto exchange clarifies users won’t be able to send bitcoins to or from their personal wallets. The page reads:
“Deposits, redemptions and/or transfers of digital assets/cryptocurrencies from and to a virtual wallet (E-wallet) through the XDEX platform are not permitted. The deposits/redemptions and/or transfers will be made only in reais, and the sale of the digital asset will be mandatory for the redemption in reais.”
The official announcement of the company’s entry into crypto space came in September when Grupo XP, the owner of XP Investimentos SA, announced that it will be launching an exchange for Bitcoin and Ethereum trading in the coming months. During the launch announcement, the Chief Executive Officer of Grupo XP, Guilherme Benchimol, reluctance was quite visible when he said,
“I must confess, this is a theme I’d rather didn’t exist, but it does. We felt obligated to start advancing in this market.”
XP Investimentos has seemingly been researching the crypto space for a while, as back in October 2017 it was revealed it registered the “XP Bitcoin” brand. At the time, a local news outlet queried the company, which then revealed it was studying cryptocurrency markets. One month later, the investment giant hired Fernando Ulrich, a Brazilian cryptocurrency expert.
In April 2018, According to the country’s Department of Federal Revenue, XP Investimentos had registered XDEX INTERMEDIACAO LTDA, whose registered capital is of about $7.3 million.
Brazil, a country that boasts the largest economy in South America, seems to have become increasingly interested in cryptocurrencies and associated blockchain technology. Not just people, the government and regulators also seem to be in support as it allowed investment funds to indirectly invest in cryptocurrencies, through the acquisition of derivatives and foreign funds. The funds are although not allowed to directly invest in the crypto ecosystem, as per the orders of the superintendent of institutional investor relations at the country’s Securities and Exchange Commission, the CVM.
While this restriction by the budding exchange will trim down a few prospective clients, users would hope it would soon allow the transfer feature of bitcoin to personal wallets.
Is Brazil poised to embrace cryptocurrencies? Do let us know your views on the same.
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Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Follow him on Twitter at @KoinKing1 or connect with me on linkedin.