Rio de Janeiro earlier this year revealed its plan to become the national hub of the cryptocurrency market. To do this, the management of Mayor Eduardo Paes (PSD-RJ) wants to launch the city’s own cryptocurrency, give a discount for IPTU paid with bitcoin and even allocate 1% of the Treasury in cryptocurrencies.
At the forefront of this work is Chicão Bulhões, the secretary of Economic Development, Innovation and Simplification of Rio de Janeiro. Bulhões has held the position since 2020, when he gave up his mandate as state deputy to join the administration of Paes.
In an interview given to Portal do Bitcoin, he shared what Rio de Janeiro’s vision for the cryptocurrency market is and what will be discussed in the Working Group dedicated to getting ideas off the ground.
At Rio Innovation Week, the city government announced the launch of Crypto Rio. Where did this idea come from?
Rodrigo Stallone, who is the president of Invest Rio, an investment attraction company for the city hall, organized a dinner with the main actors of the ecosystem, such as Marcelo Sampaio from Hashdex. They introduced us to what cryptocurrency is, how the technology works, and what the rest of the world is doing.
There it became very clear that we have an interesting ecosystem of serious people who are investing in cryptocurrencies, which encouraged us a lot given that Rio de Janeiro has a history of being very strong in the financial market.
We understand the revolutionary power of certain technologies linked to cryptocurrencies, tokenization, NFTs, and we saw an opportunity.
Did Miami Mayor Francis X. Suarez have any influence on this decision?
Of course, we had a panel with the mayor of Rio Eduardo Paes and the mayor of Miami at Rio Innovation Week, and there they started to exchange experiences. We look to Miami, New York and Zurich, Switzerland, which are references, to also position Rio de Janeiro at the center of this debate, as a representative of Latin America for the development of the crypto market.
With that, we created a working group and the mayor made some announcements of intention to, for example, invest 1% [do Tesouro do Rio] in cryptocurrency, which may eventually be bitcoin. But all this will be analyzed in this working group so that we can think of concrete measures.
The idea is for the city’s cryptocurrency to be made along the same lines as Miami and New York’s cryptocurrencies, based on the CityCoins project?
This will be discussed further in the working group. But without a doubt, the biggest inspiration is Miami. We want to walk in innovation, but obviously also walk in what the world has already recognized and seen working, so the trend is the same.
In Brazil, we also have some stablecoins made by some actors here, such as BRZ from Transfero, and we want to take advantage of what we already have. The characteristic of being decentralized in the production of certain technologies is very interesting and this is how we want to position the city.
Imagine the cariocas using the Crypto Rio day to day? What will be the usability of the currency?
We hope so. Of course, in addition to eventually being able to monetize us like Miami did, we have an initial idea that this currency is used by people.
One of the biggest demands, especially from the population that lives in the favelas of Rio de Janeiro, is banking. It has a low bankability due to places that unfortunately – and historically – have a parallel power at work.
A cryptocurrency could supply this, if it is also used in the city’s day-to-day life to pay bills and taxes, for example. Many people would like to be able to have this option because they do not have bank branches within their reach. Rio’s cryptocurrency could be another option to meet this need that exists in several poorer regions of the city.
Who are the cryptocurrency experts on the Working Group?
We don’t have names yet, but they could come up in the next few weeks. The group will be responsible for making invitations throughout the work. There are some private actors who have already asked to participate, but officially it is an internal group of the city hall that will seek these actors in its thematic meetings so that they can make their contributions.
We need to focus. Learning from the private sector, but with a public administration perspective. There are technical questions that we need to answer in order to produce the final report that will be published three months from now.
What can we expect from this final report?
It depends on the group’s work, but among the mayor’s provocations to this group is the question of investments. Will it be possible to invest in any cryptocurrency, even if it is a low and symbolic amount, for example 1% of the Treasury? And if it is legally possible, which one?
So it’s not right that it’s bitcoin?
We can’t beat the hammer on bitcoin because we need to have this more technical look, so we don’t mess up. We need to be well dressed legally, so at first it could be bitcoin, but studies are open to give this intelligence to the mayor, mainly legal.
The 1% of the Treasury that you study to allocate in cryptocurrency, would be equivalent to how much more or less?
We don’t have that number yet because it is 1% of what is available for investment. Not all the money that the city has is available for investment, the rest we cannot change.
Also on the agenda is the idea of giving a discount on the IPTU for those who pay with bitcoin. Any idea what the structure for receiving payments will look like?
The working group will discuss exactly what kind of structure we need and how, in addition to this idea of eventually making money, as Miami is doing, we could really make it easier for the carioca who could eventually use this cryptocurrency.
We want to find out if it’s worth doing this and if it’s going to be for all audiences or not.
In this way, Rio will be able to have its own bitcoin reserve. Is the idea that the property tax paid with cryptocurrency remains as a cash cryptocurrency?
Depends if it makes financial sense for the city. The prefecture will always be concerned with bringing the positive result to the public coffers. It is an investment decision that depends on market conditions and that will need to be evaluated at the moment.
Other incentives will also be discussed for this crypto ecosystem to settle here in the city and for new actors to come here.
We should go on a mission to Zurich, Switzerland, to learn what is being done there. This mission should happen later this year, so that we can bring these experiences and put Rio on the map.
Both the mayor of Miami and the newly elected of New York, Eric Adams, have already received their salaries in bitcoin, as a way of signaling support for this market. Has Mayor Eduardo Paes ever thought about following suit?
He already had the idea, but he’s still studying it.