Cryptocurrencies can help fight inflation, says Rio innovation secretary

In mid-January, the city of Rio de Janeiro announced that the city will invest 1% of its treasury in BTC. In addition, Mayor Eduardo Paes said that the cryptocurrency must be accepted in the payment of municipal taxes, such as the IPTU.

Now, the Secretary of Economic Development, Innovation and Simplification of the City of Rio de Janeiro, Chicão Bulhões, has endorsed Paes’ crypto initiative.

In an interview with CoinDesk, Bulhões highlighted that cryptocurrencies can help fight inflation. At the same time, they can prevent consumers from losing purchasing power.

Cryptocurrencies can be allies amid rising prices

As highlighted by the secretary, the deflationary aspect of some cryptoassets can be an ally in the midst of rising prices.

In other words, digital currencies can, according to him, play an important role in combating inequalities in the country:

“The last four years have been difficult for Brazil, with inflation. And we know that some cryptocurrencies are deflationary and can be used for people not to lose purchasing power. This left people interested in the possibility of having an alternative to central banks, and in having more possibilities to fight inequality”, he said.

In addition to encouraging the use of BTC to pay taxes with discounts, Paes wants to make Rio a “crypto city”. For this, the city will invest in Porto Maravalley, an attractive space for companies in the sector with tax incentives.

Brazilians’ distrust

On the other hand, the secretary acknowledged that there is distrust among Brazilians in relation to cryptocurrencies. He specifically highlighted the case of the pyramids, including that of the BTC Pharaoh, accused of carrying out a billion-dollar scam on investors in Cabo Frio. Despite this, Bulhões remains optimistic about the initiative:

“People are not so confident with cryptocurrencies because of this big case in Brazil. But we have major players in the city, which also have market share in other countries,” said Bulhões, citing companies such as Hashdex and Transfero.

Finally, Bulhões noted that, although there is criticism also due to the volatility of cryptocurrencies, they are the future:

“We know that [Bitcoin] is volatile, that some people criticize us for it. But it’s the future. And Rio wants to be a benchmark for the world as a crypto-friendly city, like Miami or Zug, Switzerland,” said the secretary.

Miami example

Indeed, Miami’s crypto initiatives inspired Eduardo Paes. Miami Mayor Francis Suarez became the first US politician to receive payment in BTC.

Also, in October, Suarez announced a plan that would allow workers to accept their paychecks in BTC. At that time, he stated that his desire was to turn Miami into a crypto capital.

“We believe we are similar to Miami. We have beaches, a good place to live, creativity…”, said Bulhões.

To discuss actions related to the development of the crypto market, the city hall created a working group. It is being coordinated by the Municipal Department of Finance and Planning in partnership with the Department of Economic Development, Innovation and Simplification. The results of the studies will be released in the next three months.