Itaú, Brazil's Largest Bank, Eyes Stablecoin Launch Amid Regulatory Uncertainty

Itaú, the largest bank in Brazil, is exploring the possibility of launching its own stablecoin. This move is contingent upon the regulatory environment in Brazil and the experiences of U.S. banks with their stablecoin initiatives. The decision comes as stablecoins gained prominence when U.S. President Donald Trump opted against issuing a central bank digital currency (CBDC) and instead prioritized private stablecoins, reflecting a broader transformation in the financial market.

Guto Antunes, who leads Itaú Bank’s digital assets team, revealed that stablecoins have been under active consideration by the bank. Blockchain technology offers opportunities to streamline financial settlement processes, making the bank closely monitor stablecoin developments. The Brazilian Central Bank has clarified its regulatory stance on such assets through a public consultation focused on stablecoins, according to Antunes.

The stablecoin market in Brazil has seen rapid growth, with stablecoins composing 90% of all cryptocurrency deals. Brazil’s Central Bank president Gabriel Galipolo noted that stablecoins are expanding into payment systems but also raise regulatory challenges due to difficulties in managing taxation and preventing money laundering operations.

Stablecoins are cryptocurrencies pegged to established financial currencies, such as the U.S. dollar, and maintain their value through holding secure assets like U.S. Treasury bonds. The market capitalization of USDT and USDC stablecoins exceeds $200 billion, making them the largest coins currently available. Several international corporations, including PayPal and Fidelity, have developed their stablecoins as part of ongoing experimental activities. Itaú is closely watching these developments as it prepares to launch its stablecoin project.

The launch of Itaú’s stablecoin requires clear regulatory frameworks, and Antunes maintains that the bank needs to be cautious. He stressed the importance of understanding current regulations and their future development, as this knowledge is crucial for moving forward. While stablecoins have already gained some usability in the market, Antunes believes that a clear understanding of the regulatory framework is essential.

Antunes endorsed the concept of secure stablecoin management by individuals, with the caveat that Brazil’s pending regulatory framework might impose limitations on this practice. The proposed system focuses on establishing an approved registry of self-custody options to maintain innovation while preventing illegal activities. The Brazilian government is also investigating plans to incorporate Bitcoin as an element for its national foreign reserves, with Brazilian chief of staff Pedro Giocondo Guerra declaring his support for implementing Bitcoin into foreign reserves, describing it as “the gold of the internet.”

Itaú’s interest in emerging technologies is evident through its potential entry into the stablecoin market. The institution exercises caution due to the need for additional regulatory directions. Brazil’s active engagement in Bitcoin as part of its economic policy-making and financial strategy further underscores the region’s forward-thinking approach to digital currencies.