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Brazil Ethereum Ecosystem Overview
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Brazil Ethereum Ecosystem Overview

Riely
Riely·October 1, 2025·14 min read
Read on Substack

Special thanks to Rob Junior, Thiago Rocha, Romina Sejas, Cristiano Silva, Luciana and João Kury for the feedback and the review.

TL;DR

  • From early pioneers like Alex Van de Sande to Brazil’s Central Bank experimenting with Drex, Brazil’s Ethereum journey is a story of experimentation, setbacks, and breakthroughs.

  • Brazil ranks among the top 5 countries globally for crypto adoption, driven by strong fintech infrastructure like PIX (Brazil’s instant payment system), widespread stablecoin use, growing retail and institutional participation, and clear regulations. Its vibrant developer communities support a dynamic ecosystem focused on payment infra and DeFi, while sectors like RWA tokenization remain emerging.

  • PIX solved instant payments in Brazil, but Ethereum is solving global programmable payments and assets.

  • Though the highly anticipated Drex (Digital Brazilian Real) V1 has pivoted away from blockchain, its exploratory phase served as an essential institutional ‘boot camp,’ giving Ethereum legitimacy and deepening technical expertise within Brazil’s major financial firms.

1. Policy Landscape

  • Brazil’s regulatory environment is characterized by an overall positive view and strong interest in crypto from federal authorities, making it one of the most robust legal frameworks in Latin America.

  • Legal Status: Crypto is not legal tender but is recognized as an asset class. It provides legal certainty for major financial firms to tokenize assets, trade, and custody in a clear jurisdictional domain.

  • New Tax System (Provisional Measure 1303): Brazil is moving to a flat 17.5% tax rate on all capital gains from crypto transactions, effective 2026.

  • Primary Regulator: The Brazilian Central Bank (BCB) is designated as the primary regulator for Virtual Asset Service Providers (VASPs).

  • Compliance: Businesses dealing in crypto must comply with stringent Anti-Money Laundering (AML) and Know-Your-Customer (KYC) rules, with reporting requirements to the Financial Intelligence Unit.

2. Local Roots: The Historical Foundation of the Brazilian Ethereum Ecosystem

The sustained strength of the Brazilian ecosystem is built on a deep history of both technical contributions and early institutional engagement, establishing the necessary technical foundation for the current RWA boom. Key milestones include:

  • Early Contributor (2014): Alex Van de Sande, a crucial Brazilian figure who joined the Ethereum Foundation before the network launched in 2014. His team led the design of the first Ethereum wallet (Mist) and engineered fundamental standards, including the ERC-20 token standard and the Ethereum Name Service (ENS).

  • OriginalMy (2015): One of Brazil’s pioneering blockchain startups, initially built an on-chain property registry to replace expensive notaries. The venture has since evolved into an e-Governance framework that provides tools to reduce bureaucracy and increase transparency across multiple sectors.

  • EthereumSP Meetups (2015–2018): A grassroots developer community organized by local builders in São Paulo, serving as an early hub for Ethereum discussions and experimentation. Victor Taelin, later known for his AI and programming language work, was an active participant while collaborating with the Ethereum Foundation.

  • Brazilian Development Bank (BNDES) (2019): At Devcon 5 in Osaka, presented a token project for better tracking of investment funds and combating corruption.

  • Pods Finance (2020): Originating at ETHDenver, Pods built the first live implementation of on-chain options based on the Opyn whitepaper. After running two DeFi protocols with millions in TVL, they later pivoted to a B2B API, helping wallets and fintechs launch DeFi features.

  • Picnic (2023): A DeFi consumer app that has become one of the world’s largest implementations of ERC-4337.

  • RWAs: Brazil has become a global leader in tokenized private credit (top 5 by volume), with Mercado Bitcoin driving this sector.

  • In 2025, Brazil ranks top 5 worldwide in crypto adoption, with an estimated 16+ million Brazilians having owned cryptocurrency. Stablecoin and DeFi usage are widespread. (Chainalysis).

3. Ethereum, PIX, and DREX (Digital Brazilian Real)

tl;dr

  • Ethereum: offers the highest decentralization and programmability but has variable fees and slower finality.

  • PIX: provides instant, 24/7, free payments but is centrally controlled by Brazil’s central bank.

  • DREX: combines central bank control with programmable features, was in pilot phase using Hyperledger Besu and now V1 will not use blockchain at all.

PIX

Launched in November 2020, PIX is Brazil’s instant payment system, and one of the largest in the world, second only to India’s UPI. It has become a global benchmark for adoption. Before PIX, bank transfers were limited to business hours (8 a.m. to 5 p.m.), and transfers between different banks often could not be processed on weekends. Today, PIX regularly handles record volumes, such as 237 million transactions in a single day, moving BRL 136 billion (~USD 30 billion). It is a public infrastructure layer owned and operated by the Central Bank of Brazil.

Graph of the number of transactions between launch (November 2020) and 2023 by Banco central

But what’s missing? Why do we still need programmable blockchains?

The main limitation of PIX is that it only solves payments. Broader financial markets, the trading of stocks, bonds, funds, property, and other assets, continue to operate under restricted schedules (5 a.m. to 8 p.m.), and often require multiple intermediaries. This makes settlement slow and costly.

Blockchains, however, allow both “money” (tokens) and “assets” (also represented as tokens) to exist and interact in the same programmable environment.

Drex

Drex was designed as Brazil’s attempt to merge programmability and composability into a state-backed blockchain system. It aimed to be slightly more decentralized than the current model, running on Hyperledger Besu with validator nodes operated by entities such as the Central Bank, the national mint, and other financial institutions.

The Central Bank of Brazil has been researching blockchain since at least 2017, as shown in their technical paper following Ethereum closely: Distributed Ledger Technical Research in Central Bank of Brazil.

The Drex Pilot

The first pilot phase tested issuance, transfer, and redemption of tokenized deposits, as well as interoperability experiments between platforms. Participants, including banks, fintechs, and other players, simulated use cases like payments, asset settlement, and smart contract integration. This phase was exploratory, focused on mapping technical requirements, cybersecurity risks, and potential regulatory adjustments.

The main challenge was finding a way to make the blockchain programmable with privacy. Pseudonymity, as seen in existing blockchains, was insufficient since with analytics and inference it would be possible to identify institutions, and even individuals, behind addresses.

To address this, the team experimented with privacy tools, mostly involving Zero-Knowledge Proofs (ZKPs).

Current Status

The conclusion of phase one was that existing privacy solutions were not yet mature enough to deliver both programmability and composability. Since then, the pace of the project has slowed considerably. The Central Bank even announced that the first version of Drex will not use blockchain at all. It is unclear whether this decision was influenced by leadership changes, fatigue among the team, or security concerns after recent hacks.

Is Drex a failure? Absolutely not. Even if Drex does not go live as originally envisioned, the project elevated awareness, credibility, and legitimacy of crypto in Brazil. Traditional financial institutions experimented hands-on with Ethereum tools such as Foundry and Hardhat, building contracts originally authored by the Central Bank itself. Even the broader web3 ecosystem can learn from Drex’s challenges as we collectively work toward a more programmable and privacy-preserving future.

4. Key Players: Startups and corporations

Brazil’s ecosystem is characterized by a unique blend of powerful traditional financial institutions, unicorn exchanges, and core infrastructure builders, all committed to web3 solutions.

BRL Stablecoin Report by IPO Research Ventures

5. Developers & Technical Talent

Brazilian developers are known for strong Fintech and security talent.

Projecting the top 10 developer communities on GitHub through 2030 by Github
Fastest growing developer communities in Latin America by Github
Global crypto developer share 2024 by Electric Capital
New developer share by country from Electric Capital Developer Report

6. Community: Cultivating the Builder Pipeline

Hackathons, meetups, and dedicated educational programs have been critical in onboarding the next wave of Ethereum builders, providing training, mentorship, and visibility.

Grassroots Communities

Physical Hubs

Dedicated physical spaces are vital for converting virtual communities into tangible, collaborative ecosystems.

Media Groups

7. Acceleration & Investment: Capitalizing the Ecosystem

Both domestic and international capital recognize Brazil’s potential, and they are supporting startups to get access to crucial funding. However, accessing that capital is not easy, mainly due to limited presence of local and global VCs in Brazil (and LATAM in general), as well as language barriers, since English proficiency is lower compared to hubs like India.

8. University & Academia

While formal blockchain curricula remain limited at Brazilian universities, student-led clubs, community-partnered courses, research labs, and grassroots meetups are filling the educational gap through community-driven initiatives.

Blockchain Club

Ethereum Course

Research Labs

9. Highlighted Events

Further Reading

Thanks for reading, and have a nice day! 🌸

Best regards,

Riely and the Geode Labs team.

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Riely

Riely

Riely is the Editor in Chief of Local Ethereum, covering Ethereum and crypto adoption stories from around the world. Based in Berlin, she covers stories from India, Argentina, Poland, Taiwan, Serbia, and beyond, with a focus on how decentralized technology intersects with local culture, economics, and politics.

Published October 1, 2025 · 14 min read

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