The collapse of FTX’s cryptocurrency empire may have damaged confidence in cryptocurrencies in Brazil’s retail and institutional sectors. However, its effects will not affect ordinary citizens – they will still use cryptocurrencies for cross-border transactions.

Reflecting on FTX’s recent decline, Thiago César, CEO of fiat onramp provider Transfero Group, said that like much of the world, the exchange’s decline has hurt people’s interest in centralized cryptocurrencies. Confidence in exchanges and cryptocurrencies as a whole.

Transfero Group is closely associated with the Brazilian cryptocurrency ecosystem and FTX, as it was the exchange’s fiat on-ramp provider and issuer of the Brazilian stablecoin BRZ, which was listed on the now-defunct exchange.

César told Cointelegraph that the exchange’s closure removed a “huge source of liquidity” from the market, as FTX ranked among the top three in terms of trading volume.

He also noted that the uncertainty surrounding centralized cryptocurrency exchanges has led to “massive outflows” from Brazilian exchanges, with many seeking self-custody — exchanges are estimated to have lost at least 20% of trades so far quantity.

“A lot of people are even trying to liquidate any positions they have in cryptocurrencies, while we’re just holding money in bank accounts.”

César noted that FTX Legends will make cryptocurrency investing a “harder sell” for new investors and traders.

“Certainly for crypto investors/traders. It’s harder to sell now. If you go to someone who doesn’t understand crypto and try to convince him to invest, especially in Brazil — people have always been skeptical about crypto . Now it’s even harder,” he said.

However, he noted that the FTX debacle is unlikely to have any impact on people who use cryptocurrencies as a means of cross-border payments or “currency internationalization.”

“A lot of cryptocurrency trading volume in Brazil comes from participants willing to exchange their local currency for international liquid assets denominated in dollars. So in that sense, the market is not dying because cryptocurrencies are just a rail for that.”

In October, a Chainalysis report found that remittance payments and fighting inflation were the two most important drivers of cryptocurrency adoption in Latin America.

related: Brazil’s Securities and Exchange Commission Seeks to Change Its Role in Crypto Regulation

César said the FTX debacle could be “used as a lobbying tool” by local exchanges to push for regulations aimed at bringing international exchanges into line.

César added that these cryptocurrency exchanges have been pushing for Brazilian regulation to “isolate” local and international exchanges by depriving them of access to their global liquidity books.

“They propose regulation, for example, to separate liquidity on the Brazilian real books from the international books.”

César explained that such regulation would harm international exchanges, as their main advantage comes from liquid international global books.

in a november. 18 Report According to Reuters, Roberto Dagnoni, executive chairman and CEO of Mercado Bitcoin, said that Brazil’s encryption law has been “dormant” during the election period, but now needs to be prioritized.

“The rules that exist currently don’t apply to certain players, so they can do whatever they want,” he said.