Retail starts using cryptocurrencies, but demand is low

The narrow door on a street in Tatuapé, a neighborhood on the East side of São Paulo, makes the tattoo parlor almost imperceptible. The decor is no different from most establishments of the type, nor are the tattoos displayed on their social networks. Giving interviews for reports and academic papers, however, has become commonplace at Wayne Tattoo and Piercing.

The demand is the result of an unconventional payment option adopted there. Sandro Wayne Soares, 42, owner of the studio, has been accepting bitcoins in exchange for service since 2013, when the asset completed five years of existence. The tattoo artist is a cryptocurrency enthusiast. “I wanted to give another payment option, a new technology”, he says.

With the popularization of bitcoin in recent years, the universe of cryptocurrencies extrapolated technology companies. Commercial establishments operating in the real economy, such as developers, hotels and even bakeries, started to accept that customers use the new digital assets. The demand generated a myriad of companies that entered the business to be the intermediary of purchases.

In 2013, however, Sandro started in the most rudimentary way. He published on the internet that he accepted bitcoins and received payments from wallet to wallet — or wallet, as the software that stores cryptoassets is called.

“I was looking for enthusiasts of this libertarian ideal,” he says, referring to bitcoin’s decentralizing characteristic. Cryptocurrencies work through the blockchain, a system that stores transactions through a network of computers around the world, without needing a Central Bank to issue money. “I think it’s a problem for the government to control the value of our currency,” he says.

Currently, transactions in cryptocurrencies carried out on Wayne Tattoo and Piercing are facilitated by a machine from Pundi X, a company based in Singapore. The demand for this type of payment in the studio was more heated before the pandemic, but now even the return of commerce has not excited cryptocurrency owners. “The demand is very low. It’s zero”, says Sandro.

Like Pundi X, several startups have filled the gap in payment intermediation.

Since November last year, parents who have their children enrolled in schools served by the fintech Educbank can pay the institution’s tuition in bitcoin. The startup serves elementary schools by administering the monthly fees, which are fully charged to the institution’s account on the payment deadline, regardless of any delays.

The father who opts for the novelty will access, through a QR Code, the fintech digital wallet and the value of the monthly fee in the cryptocurrency at that moment. When receiving from the customer, the company immediately converts the asset into reais, avoiding dealing with the already known sudden fluctuations in the currency.

“Education has always had the reputation of being the last to receive the news because it is not such a profitable industry. We want to reverse that”, says Lars Janér, co-founder and CEO of the company.

In the construction market, Even, a publicly traded company with shares traded on the Brazilian Stock Exchange, closed in November last year a partnership with the cryptocurrency trading platform Mercado Bitcoin.

Under the agreement, customers who so wish can purchase up to 100% of the value of the properties sold by Even using bitcoin or the ethereum cryptocurrency.

The first operation carried out through the partnership took place in December, when two units of the Facto Paulista venture, in the Bela Vista neighborhood, in São Paulo, were settled with cryptocurrencies, in an approximate amount of R$ 1 million.

“We want to make life easier for our customers and offer the possibility of fast payment in this type of currency that has grown a lot”, says Carlos Wollenweber, Even’s financial director.

Parque Hotel Holambra, in the interior of São Paulo, started to accept payment with bitcoin about three years ago and is still waiting for the first guest interested in settling accounts in the modality.

“I believe that many people who own bitcoin are not sure how to use it, or simply prefer to keep it as an investment. Several customers have already commented on it, but so far none has made a payment”, says Guilherme Coelho, executive director of the hotel.

Tired of waiting for customers, the veterinary clinic PreVet Home stopped accepting cryptocurrencies as a means of payment. The idea came from the site’s developers, who would be in charge of the operation in case anyone interested appeared, which never happened.

Renato Nagliati, 34, the clinic’s secretary, believes they may have burned the start. “It’s getting more and more popular, and we’ll probably start to accept it effectively when bitcoin is in people’s hands, on a day-to-day basis,” he says.

Despite starting to behave like a currency, for the Brazilian State this exchange is an exchange of goods, regulated by Chapter II of the Brazilian Civil Code. It would ultimately be like giving a used car as a down payment on an apartment.

As it is considered an intangible asset, cryptocurrency can be accepted as a means of payment in Brazil, but not required. “Payment agreements in gold or in foreign currency are void”, determines section III of the Civil Code.

Part of the technology enthusiast community, however, believes that these assets have currency characteristics. They can release a debtor from a debt, for example — it’s the releasing power.

“Currency is something that is socially accepted as a means of exchange”, says Rio Grande do Sul prosecutor Melissa Guimarães Castello. She is the author of a 2019 article on cryptoasset taxation for the FGV Law magazine (Fundação Getúlio Vargas). For a more legalistic current, she says, currency will only be what is issued or recognized by a state.

At the end of February, the CAE (Commission on Economic Affairs) of the Senate approved a proposal that regulates financial operations with cryptocurrencies in Brazil.

The text, which is in the Chamber of Deputies, includes service providers with virtual assets in the group of financial institutions. They would, therefore, be subject to all the rules of the financial crimes law and the Consumer Defense Code.

THE Sheet showed that the Central Bank is also addressing the issue. The autarchy evaluates the elaboration of guidelines to impose supervision of financial transactions with cryptocurrencies in Brazil and define penalties.

During the report, the Sheet contacted several companies that accept cryptocurrencies, but who had never made sales like this. Others refused to accept.

According to André Horta, chief executive of BitconToYou, the lack of interest may be linked to the low that bitcoin, the most well-known cryptocurrency, is facing. Since November, the asset has suffered a drop of almost 40% after months of consecutive highs.

“If a person buys a bitcoin for almost R$370,000 and now sees that it is at R$220,000, he will not take this asset that he bought so expensive and spend it on clothes. In his mind, if he does that, he will be realizing the loss. She holds on to her wallet and waits for crypto to come back,” he says.

In the crypto-assets market since 2010, the brokerage B2U Pay started to intermediate the payment in crypto-assets in retail in early 2021. “We saw that the market had a demand for other types of services”, says Horta. Currently, the company serves 100 physical stores.

“He’s still shy,” he says. “Actually, today people still use cryptocurrency as a speculative investment.”