Welcome Bipa to the family!

We are thrilled to announce that ego death capital led a US$3mm Seed round into Bipa, a Brazilian digital banking app fintech that integrates Bitcoin, USDT, and Brazilian real. We had great co-investors alongside us including Initial Capital, Fulgur, Timechain, Stillmark, and Oikos (a Brazilian family office).

Below is an article written by Bipa founder + CEO Luiz Parreira, about Bitcoin in Brazil, his personal Bitcoin journey, and how he and the fantastic team around him have made Bipa so successful to date.

For those who speak Portugese, you can follow Bipa on Twitter here.

In Brazil, you can pay for coffee with Bitcoin

By Luiz Parreira, Bipa Founder and CEO

Imagine waking up one morning to find that your life savings have vanished overnight – not because of a bank robbery or a market crash, but because your own government decided to "freeze" all bank accounts. This nightmare scenario became a reality for millions of Brazilians in 1990 when President Fernando Collor de Mello implemented a drastic economic plan that confiscated savings accounts with balances over 50,000 cruzeiros (about $1,300 at the time).

This wasn't just a minor financial hiccup. It was a seismic event that shook the very foundation of trust between Brazilians and their financial system. Families lost their hard-earned savings, businesses crumbled, and an entire generation learned a harsh lesson: when it comes to money, you can't always trust the powers that be.

Fast forward to today, and Brazil has become an unlikely pioneer in the world of digital finance. In a country where the ghosts of hyperinflation and government overreach still linger, a new financial revolution is brewing. And at the heart of this revolution? Bitcoin.

Welcome to modern-day Brazil, where you can now buy your morning coffee with satoshis, and where innovative companies are building bridges between the old world of finance and the new, decentralized future. This is the story of how a nation scarred by financial trauma is now leading the charge in Bitcoin adoption and fintech innovation.

Brazil's Financial History

High inflation was one of the biggest challenges for Brazilian families in the late 1980s and early 1990s. In 1993, annual inflation soared over 2,477%, causing prices of goods and services to skyrocket. Basic necessities like food and clothing saw their prices double within weeks. This period of hyperinflation eroded purchasing power and created economic instability, severely impacting daily life and financial security for many Brazilians. The relentless increase in prices meant that salaries and savings quickly lost their value, leaving families struggling to afford even the most essential items. During this period, the prices of items like cars and houses started being quoted in dollars instead of the local currency, highlighting the severe loss of confidence in the local currency. The economic chaos disrupted everyday activities, as people had to spend more time and effort managing their finances, often resorting to bartering or other informal means to obtain what they needed.

Image: chart showing Brazil's annual inflation rate between 1951 and 1997. Source: https://commons.wikimedia.org/wiki/File:Brasil_Inflacao_1950_1997.svg

As these annual inflation figures in the hundreds or even thousands of percent sound unreal to readers from countries with more stable economies, I've included 2 more images which show the monthly inflation rate rather than the annual rate to better illustrate how Brazilians were affected by inflation between the 1980s and the 1990s.

Image: chart showing Brazil's monthly inflation rate between 1940 and 2010. Source: https://www.suno.com.br/artigos/expurgo-inflacionario/

Image: Breaking down the previous chart to show just the average monthly inflation over this period by decades, it's clear that Brazil's average monthly inflation rates between 1980-2000 were consistently higher than what countries like the U.S. typically see in an entire year. Source: https://www.suno.com.br/artigos/expurgo-inflacionario/

In Brazil, almost every family has a story about how inflation has shaped their lives, and mine is no different. Growing up, my parents would take me along on our monthly grocery trips—a ritual that was less about convenience and more about survival. We would spend hours navigating the crowded aisles, filling our cart with all the necessities we could afford, knowing that if we waited even a day, the prices could skyrocket beyond our reach. This was the reality during the days of hyperinflation when prices could double overnight, and a delay in purchasing could mean the difference between having enough to eat and going without.

This habit of bulk shopping, born out of necessity, has persisted in many Brazilian households, including among my own relatives. My aunt, for instance, still prefers to do large grocery shopping, a practice rooted in those difficult times, even though inflation today is not as severe as it once was. It’s a mindset ingrained in our culture – a belief that the only way to manage household expenses is by buying in bulk to protect ourselves from the unpredictability of prices.

However, in times of more stable prices, where the value of money doesn’t erode daily, this practice may no longer be necessary. Yet, the scars of those challenging years remain, shaping how we approach our finances even today. For many of us, the lessons from the past are not easily forgotten, reminding us of the importance of being vigilant and prepared in the face of economic uncertainty.

Brazil: A Fintech Powerhouse and Fertile Ground for Bitcoin

Brazil’s journey to becoming a fintech powerhouse is deeply intertwined with its tumultuous economic past. The hyperinflation that ravaged the country in the late 20th century was partially quelled in 1994 through the introduction of a new currency and more orthodox economic policies. This period of stabilization did more than just curb inflation – it also set the stage for Brazil to emerge as a hub for financial innovation.

A pivotal moment in this transformation came in 2002 with the launch of the Brazilian Payment System (SPB). This modernization of the country’s financial infrastructure was more than just a technical upgrade; it was a foundational step that would later support the groundbreaking advancements in Brazil’s financial landscape. The SPB paved the way for Brazil to take a leading role in payment technology across Latin America.

Fast forward to 2020, Brazil took yet another significant leap with the introduction of PIX, the Brazilian Instant Payment System (SPI). PIX, a government-initiated payment network, operates like a Lightning Network for fiat currency, allowing for real-time transfers around the clock. Its impact has been transformative, significantly enhancing financial inclusion, reducing transaction costs, and fostering a more competitive financial landscape. The success of PIX reflects Brazil’s growing appetite for innovation in financial services.

Parallel to these systemic changes, a wave of fintech startups began to rise, bringing with them a revolution in digital banking and mobile payments. Companies like Nubank, Inter Bank, and PicPay have redefined the way Brazilians interact with financial services. Among them, Nubank has soared to unprecedented heights, becoming a fintech unicorn and Brazil’s most valuable bank, with a market capitalization of US$60 billion.

These developments in fintech have not only transformed traditional banking but have also laid the groundwork for the next big wave in finance: Bitcoin. Brazil’s unique mix of economic, technological, and demographic factors positions it as an ideal market for Bitcoin adoption. With approximately 82.7 million people aged 18-45, Brazil boasts a young, internet-savvy population that is primed for fintech adoption. This digitally native generation, having grown up with technology at their fingertips, is particularly open to innovative financial solutions like Bitcoin.

The growth of Bitcoin and cryptocurrency adoption in Brazil has been nothing short of remarkable. In 2021, 4.9% of Brazilians held some form of cryptocurrency. By 2022, this figure nearly doubled to 7.8%. The momentum continued, with 12% of the population owning cryptocurrency by 2023, and projections for 2024 estimate this number to reach 17.4%, translating to approximately 38 million Brazilians. This growth not only highlights Brazil’s readiness to embrace digital currencies but also positions the country as a key player in the global crypto landscape.

Image: Chart created by the author illustrating Brazil's crypto asset adoption growth, which surged from 4.9% to 17.4% between 2021 and 2024. Extrapolating this trend suggests that nearly 50% of Brazilians could be using crypto assets by the end of the decade.

Several factors drive this rapid adoption. Brazil’s history of hyperinflation and currency instability has fostered a deep-seated mistrust of traditional financial systems, making alternative stores of value like Bitcoin particularly appealing. Moreover, the technological readiness exemplified by the widespread adoption of PIX has primed Brazilians for digital financial solutions. On top of that, recent regulatory developments, such as the 2022 cryptocurrency legal framework, have provided a secure operating structure that boosts investor confidence. Additionally, Brazil’s significant remittance market finds in Bitcoin a more efficient and cost-effective solution for cross-border transactions.

As Brazil continues to embrace fintech innovations and Bitcoin adoption accelerates, the country is poised to become a global leader in integrating traditional and cryptocurrency-based financial systems. This convergence of factors presents a unique opportunity for companies to drive meaningful change in how Brazilians interact with money and build their financial futures.

The rapid rise of Bitcoin in Brazil is not just a passing trend – it’s a testament to the country’s innovative spirit and its readiness to embrace the future of finance. As the world watches, Brazil stands at the forefront of a global financial revolution, ready to shape the future of money in the digital age.

The Birth of Bipa: A Personal Journey

At 17, I moved to Perth, Australia, to learn English, where the difficulty of transferring money between my mother and me revealed the difficulties and fragility of the global financial system. Upon returning to Brazil, I decided to learn coding to pursue my lifelong entrepreneurial dreams. I landed an internship at a wealth management startup, but my interest in Bitcoin was too strong to ignore.

At the time, crypto companies were overcomplicating their products with multiple cryptocurrencies and trading features. I noticed that most Bitcoin users just wanted a simple, easy way to buy or sell it. Additionally, many people didn’t own Bitcoin because they couldn’t use it practically. So, in February 2020, I launched Bipa to connect Bitcoin with people’s daily financial lives and solve my own frustrations as a Brazilian Bitcoiner.

The first year was incredibly tough, filled with constant challenges and little traction as I worked alone. But I stayed motivated by the potential of the idea and the need for a simple way for Brazilians to use Bitcoin. The turning point came with the implementation of the Lightning Network in November 2020, and Bipa began to grow. Now, with a team of over twenty employees, we’re focused on helping everyday Brazilians access and use Bitcoin, staying true to our vision: simplifying Bitcoin and making it a practical part of daily life.

Bitcoin for everyone, everyday

We envision a world where using Bitcoin is as simple and natural as using any other form of money. But for Bitcoin to truly cross the adoption chasm and become a mainstream financial tool, it is necessary to create innovative financial services with Bitcoin at their core.

Bipa seamlessly integrates with traditional currency (BRL) and stablecoins like USDT. Through features like BitPix, users can pay bills or make everyday purchases with Bitcoin, turning it into a practical tool rather than just an investment. Bipa’s auto-conversion feature also allows any PIX payment to be instantly converted into satoshis, helping people easily accumulate Bitcoin with every transaction. Looking ahead, Bipa plans to introduce a credit card that lets users leverage their Bitcoin, stablecoins, and BRL as collateral, transforming Bitcoin from a speculative asset into a functional financial resource for everyday use. As Bipa is also connected to the Lightning Network, Brazilians working abroad can send their savings to Brazil for free. The Brazilian international remittance market is estimated to be between 2 and 4 billion dollars, representing about 0.2% to 0.4% of the country's GDP.

To support our growth, we recently raised a US$3mm funding round, led by Ego Death Capital and with co-investors including Initial Capital, Timechain, Stillmark, Oikos (a Brazilian family office).

The Future of Bitcoin in Brazil: A New Economic Paradigm

The rise of Bitcoin in Brazil signals a new economic era, giving Brazilians the tools to protect their assets, transact freely, and participate in the global economy on equal footing, potentially reshaping the country's financial landscape.

The potential of this new financial era is limitless, and we're only at the beginning of this exciting journey. Today, you can already buy your morning coffee with Bitcoin in Brazil – a small but significant step that hints at the revolutionary changes to come.

The future of finance is here, and it also speaks Portuguese. Welcome to the Bitcoin revolution, made in Brazil!